First Time Home Buyer Mortgage Services

Licensed Mortgage Professional in Maple Ridge, BC

Help First Time home buyers navigate the often-complex lending process and assist them from start to finish.

The mortgage process can be stressful and is particularly stressful on a First Time Home buyer. The amount of information and the complexities of purchasing your first home can be overwhelming. Thankfully, I am here to help you navigate the buying of your first home and mortgage process. Below is a step-by-step guide to assist you and to make your first home purchase smooth.

1. Call me and arrange a meeting so I can review the process and assess what your needs and affordability are.
2. Arrange for a pre-approval with a rate hold to secure a rate for when your application for the mortgage goes live.
3. Typically, the lender will require certain information from you, and it will also assist me in calculating what you can afford; they are:
   1. Current Paystub (within 30 days)
   2. Letter of employment
   3. 90 days history of the source of your downpayment
   4. If it is a gifted downpayment, the source of the gift and proof of funds being in your account. A gift letter form from the lender will satisfy the 90-day history requirement.
4. The lending process can be trying at times depending on the type of employment you have and the lender requirements for documentation. This requires patience from buyer clients. Remember, you are asking them to lend you hundreds of thousands of dollars and they want to make sure that you can pay them back.
5. GDS and TDS
   1. GDS – Gross Debt Service. This is the amount of your gross income (%) that you can pay for your mortgage payment (including interest), strata fees (if applicable), property taxes and heat. This number cannot exceed 39%.
   2. TDS – Total Debt Service. This is the amount of your gross income that you can pay for all the items in GDS, plus any personal debt. This number cannot exceed 44%. In simpler terms, only 5% of your gross income can go towards personal non-mortgage debt. If it does, the numbers will be rolled back to fall within the ratios. Personal debt is one of the leading causes of not qualifying for a home.
6. Qualification rate
   1. The qualification rate is the test the Government places on borrowers to ensure they can withstand potential future rate increases and to keep household debt in line. Currently the stress test for qualification is 4.79% and will be increasing to 5.25% beginning June 1st for both insured mortgages (>20% down) and uninsured mortgages (>20% down).
7. Deposit, downpayment and closing costs.
   1. The deposit is required when you have placed an offer on a home and all the conditions have been satisfied. This is typically 5% of the purchase price or slightly lower. This amount forms part of the total purchase price and is part of the accounting at the lawyer or notary when you sign.
   2. Downpayment is the total amount you wish to put towards the purchase price of your home and is regulated by the Gov’t. Homes under $500,000 can have as little as 5% downpayment and homes over $500,000 will require 5% up to $500,000 purchase price and 10% for any amount over $500,000.
   3. Closing Costs are always calculated at 1.5% of the purchase price, regardless of whether you are a First Time Home Buyer or not. You must prove that you have the means to pay for the total downpayment, plus the 1.5% closing cost even though First Time Home Buyers may have an exemption to property transfer tax.
8. Typically, the lending process takes 7-10 business days to put in place so the purchase of a home will need to have a clause to allow for this timeline.
9. Once we have a commitment from a lender and all the conditions have been satisfied, the mortgage process is for the most part complete. Only choosing a lawyer is left and then to arrange with them to sign the mortgage documents.