- A potential home buyer should get a mortgage pre-approval to know what financing is available and have an advantage over buyers who are not pre-approved. - Programs exist for buyers putting down only 5% for a principal residence or those who are self-employed with at least 2 years of income documentation. - A credit score is determined by factors like past payment history, credit utilization, credit history, types of credit used, and credit inquiries, and estimates the risk of a buyer failing to make payments.

1. Get a Pre-Approval Get a mortgage pre-approval Complete verification Know what you can afford Available Financing Every potential home buyer should get a pre-approval before going home shopping. A pre-approval will give you the confidence of knowing that financing is available. Can give you negotiation advantage against other home buyers who aren't pre-approved.

2. 5% Down Program Designed for those who don't have 20% set aside for a down payment. The 5% down program is for principal residences only (cannot be rental property). Must provide proof of down payment plus 1.5% of the purchase price for closing costs. Wide variety of payment terms!

3. Incentive Programs The 2009 Federal budget: Money for those who wish to purchase their first home or renovate their existing home. First-time buyers receive tax rebate toward closing costs or can withdraw up to $25,000 from their RRSPs for a down payment – tax & interest free. Home renovations are eligible for ecoENERGY Retrofit grant or credit.

4. RRSP First-time Buyers Program Maximum $25,000 tax-free withdrawal Must be first-time buyer Must intend to occupy the home as a principal residence within 1 year. Minimum repayment schedule is 15 equal annual installments. The funds must have been invested into the RRSP for 90 days.

5. Self-Employed Program Programs for Self-Employed & Commissioned Sales Borrowers There are many programs for self-employed & those with unverifiable income to qualify for a mortgage with a low down payment. Purchasers must have a minimum of 5% down Purchasers must be able to demonstrate that have been self-employed for 2 or more years. Self-employed purchasers must provide most recent tax year’s Income Tax Notice of Assessment confirming that they have filed income tax returns. Self-employed purchasers must have a very good credit rating

6. Closing Costs Description Amount Appraisal $350 Home Inspection (approx.) $350 Legal Fees (approx.) $900 TOTAL: $1,600 Survey, Tax Adjustment, Interest Adjustment & Property Transfer Tax fees may apply. Additional costs involved above the minimum down payment, include:

7. What is a Credit Score? A credit score is a rating used by a lender to help determine whether you qualify for a particular credit card, loan, or service. Based on information in your credit file, the credit reporting company analyzes your information using a complex mathematical model to yield your credit score. Most credit scores estimate the risk a company incurs by lending you money or providing you with a service, specifically, the likelihood that you'll fail to make payments in the next two to three years. The higher the score, the less risk you represent. Your score is calculated by a mathematical equation that evaluates many types of information found in the credit file.

8. What is a Credit Score? What Factors Affect a Score and by How much? Past Payment Performance – 35% The fewer late payments, judgments, liens or collections the better. Credit Utilization – 30% Low balances on several cards is worse than high balances on a few cards. Balance should be at or below 30% of your available credit. Credit History – 15% The longer that accounts have been open and in good standing, the better. Avoid ‘credit surfing.’ Opening new accounts and closing established accounts will lower a credit score. Types of Credit in Use – 10% Finance company accounts score lower than traditional banking or retail accounts. Deferred payment options funded by finance companies impact the score accordingly. Inquiries – 10% Looking for new credit over a short period of time can be indicative of higher risk. Promotional or administrative inquiries (i.e. credit grantor updates) will show on the report but do not affect the credit score.