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First-Time Home Buyers


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First-Time Home Buyers

  1. 1. First-Time Home Buyers Michael Williams Mortgage Agent. FSCO Lic.# M08002961WWW.LENDERSCHOICEMORTGAGE.CA © 2011 Michael Williams
  2. 2. Five Things Every First-TimeHome Buyer Needs to Know. Morcan Financial Inc. 1225 Kennedy Rd. • Suite 2000 Toronto, Ontario Phone: 647-933-4228 • Fax: 1866-589-1391 © 2011 Michael Williams
  3. 3. How much do you qualify for?There are strict guidelines in mortgage lending NOTESregarding how much of your income can beused to make mortgage payments, especially ifyou’re buying a home with a smaller downpayment. No more than 32% of your gross(before taxes) income can be used to cover yourmortgage payment and property taxes plus a setamount for heat expense. Another 8% of yourgross income can be used for other debts (loanpayments, credit card payments, etc.) for a totalof 40% of your income for your mortgage,property taxes, heat and other payments.Example:Your gross (before taxes) annual income is$50,000.32% of $50,000 = $16,000 / 12= $1,333 per month$1,333 is the maximum amount that can be usedfor a mortgage payment, property taxes, andheat.8% of $50,000 = $4,000 / 12 = $333 per month$333 is the maximum amount that can be usedfor any other monthly payments (loans, creditcard payments, lines of credit, etc.). There areexceptions , talk to you mortgage agent. © 2011 Michael Williams
  4. 4. Down Payment NOTESUnless you are purchasing a home with no downpayment under a specific “no down payment”mortgage program, you will be required toprovide proof that your down payment money isnot borrowed.Examples:If your down payment is from savings, you willbe required to provide three months history onthe bank account the savings are in.If your bank account is from an RRSP orinvestments, a statement on the RRSP orinvestment account.If your down payment is a gift from a familymember, you must provide a copy of a “giftletter” together with confirmation that the giftmoney has been deposited into your own bankaccount.If your down payment is coming from the saleof your current home, a copy of the sale contractto confirm the sale price and a copy of a recentmortgage statement to confirm how much iscurrently owing. If your sale has alreadycompleted, a copy of the “Statement ofAdjustments” from the lawyer who handled thesale. © 2011 Michael Williams
  5. 5. Income NOTES You will be required to provide your mortgage agent with written confirmation ofyour employment and income. Your mortgage agentwill let you know the exact documents required foryour situation, but generally if you are not self-employed, the following will be required:- A letter from your employer, on companyletterhead, signed and with contact info, confirmingyour position, time on the job, hours, and salary.- A copy of a recent paystub, or most recent T4.If you are self-employed, your mortgage agent will letyou know what documents to provide. © 2011 Michael Williams
  6. 6. Credit Report NOTESYour credit history and credit “score” are just asimportant as your income, employment anddown payment when it comes to gettingapproved for a mortgage. The companies youhave credit with report on a regular basis to the“credit bureau,” Equifax. It’s important toalways be aware of the information contained inyour credit report. Your mortgage agent will letyou know how to obtain a copy of your owncredit report, and how to correct any inaccurateinformation.Credit reporting is all about making yourpayments on time. Many people will skip makinga small minimum payment because they knowthey’ll be paying off the entire balance at the endof the month. But every time you miss apayment due date, it’s recorded on your creditreport. You may have paid your balance off infull, but the fact is you made that payment late. Ahistory of late payments can cause seriousdamage to your overall credit rating, which willaffect whether or not you can be approved for amortgage. If you have damaged your credit, yourmortgage agent will have suggestions to help youget your credit back on track. And if you haveno credit history at all, your mortgage agent cansuggest ways to establish credit so you can applyfor a mortgage in the future. © 2011 Michael Williams
  7. 7. What type of mortgage isright for you?3If you’ve mentioned to anyone that you’re NOTESbuying a home or applying for a mortgage,you’ve probably gotten lots of opinions on thetype of mortgage you should have. With somany mortgage options available today, how doyou know which one is right for you? Everyonehas an opinion on mortgages and interest rates,but to be sure you’re getting expert advice, youneed someone who specializes in mortgages.When you visit a bank for a mortgage, theperson you meet with knows only the productsoffered by that particular bank. But a mortgageagent is familiar with all the options available.Why limit your options to what’s offered by justone bank? Your mortgage agent will help you byexplaining the different types of lenders andmortgage products, determining what is mostimportant to you, and finding the lender with themortgage that is just right for you, and bestsuited to your unique situation. © 2011 Michael Williams
  8. 8. ProfileMichael Williams is a mortgage professional with MorcanFinancial Inc. With eight years of experience, Michael hasarranged financing for hundreds of clients in the Toronto andsurrounding areas. He specializes in working with first-timehomebuyers, and takes the time to help his clients through themortgage process, step-by-step.Morcan Financial Inc. has been in business since 1998.Morcan agents pride themselves in their ability to assess aclient’s entire portfolio and determine the right mortgageproducts for the client’s needs. With access to a multitude ofmortgage products from a wide variety of mortgage lendersacross Canada, we will find the mortgage that is best for you. © 2011 Michael Williams