First-Time Buyer

First-time Buyer Benefits:

  • NEW! Help for your downpayment: BC Government Government Mortgage and Equity partnership, for full details click here. FAQ, click here.
  • To calculate how much of a 2nd mortgage you are eligible for under the new program, click here.
  • For the Program Overview and Applicant Information, click here. Included in this link is “How to Apply.”
  • RRSP withdrawal of up to $25,000. For eligibility & withdrawal guidelines, click here.
  • The BC Government Property Transfer Tax is waived for prices up to $500,000. There is a partial exemption available for prices up to $525,000. For eligibility guidelines, click here.
  • Newly Built Home Exemption (also available to repeat home buyers). This exemption waives the property transfer tax for newly built homes valued up to $750,000. A partial exemption may be available for homes valued between $750,000 and $800,000. For full eligibility guidelines and occupancy requirements, click here.

The Step-by-Step Process:

– Find out how much you are eligible for a mortgage. This provides you with a realistic sense of how much home ownership will cost in terms of what your monthly payments, strata maintenance fees, and property taxes will be. You will also find out how much you need for a down payment and how much to budget for your closing costs. For more information on what a pre-approval means in today’s lending environment, click here.

– The Canadian government announced new rules for qualifying for a mortgage; mcc-new-rules-oct-12-2016. These new rules may impact how you qualify. If you had a pre-approval previously arranged, it is a good idea to revisit your application, and see if the new rules have impacted what you now qualify for.

– Review the list of potential closing costs here.

– CMHC’s list of 10 Words to Know When Buying a Home: cmhc-10-words-to-know-when-buying-a-home.

– The documentation needed for a pre-approval is as follows:

  • Completed mortgage application, available here.
  • Permission is required to obtain your credit report. Here is our Consent & Authorization Form.
  • Income verification by way of a signed employment letter & current paystubs. The employment letter needs to confirm your starting date of employment, position, and salary. Also, if you are new to your employer, confirmation of being passed the probation period is also helpful. If you are paid hourly, the hourly rate should be stated along with what your guaranteed hours per week are.
  • If you are self-employed, the banks will ask for both the T-1 General tax return + the Notice of Assessment for the last 2 year’s. All outstanding taxes are required to be paid and up to date.
  • If you are an owner in a company, you will also have to provide the last 2 year’s company financial statements, and proof that you are an owner.
  • Confirmation of down payment by way of your last 3 months’ bank/investment/RRSP statements.
  • Family gift letter (if applicable).

– Consult a local real estate professional. They have knowledge of the local market and available listings. They also provide valuable advice during the offer negotiations.

– Speak with a lawyer or notary public for a quote on their fees and availability. Most law offices do conflict of interest checks to make sure they are only acting for you in the transaction. If you have initiated the relationship with the law firm, it will be easier for them to accommodate you when you have an accepted offer.

– When you find the right property, the offer writing stage begins. This is where your realtor will be a big help. The offer is usually written with subjects such as: subject to financing, subject to inspection, subject to review of strata information, etc. You are usually given a window of roughly 7 to 14 days to fulfill these subjects.

– Speak to an insurance broker about obtaining adequate insurance for your new purchase. Properties that are “fixer uppers” or “rental” will have different requirements that you need to know up front. Click here for our blog post that covers home insurance in detail.

– Once you are satisfied that your financing is in place & and the property meets your expectations, you remove your subjects and give a deposit to make your contract “firm and binding.” The amount you give for the deposit forms part of your down payment. Congratulations!! You have bought a home!!

– Then approximately 2 weeks before closing, you may have an appointment with the bank that has given you the mortgage. They often call this the “branch fulfillment” appointment where you may be required to show your ID, choose a payment frequency, and have any questions answered. Not all lenders have the appointment, it depends on which bank you end up dealing with.

– Once the branch fulfillment appointment is complete, the mortgage instructions are released to your lawyer or notary’s office, and preparation of the conveyance and mortgage documents begins.

– Approximately 2 to 3 days prior to the completion date, your lawyer or notary will give you the exact amount of funds needed to close. They will ask you to bring in a bank draft or certified cheque payable to them “in Trust.” This amount will be comprised of the balance of down payment funds, legal fees, property tax adjustments, possibly title insurance, and the BC Government Property Transfer Tax if applicable.

– Then final packing & moving day!! Your realtor will arrange to meet with you to give you the keys to your new home.

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