Buying Your First Home

Q.1. What do I need for a down payment?

With mortgage default insurance you can put as little as 5 per cent cash toward your purchase. Anything less than 20 per cent of the purchase price requires mortgage default insurance. Typically this insurance is offered through your lender, and the limit is regulated by the federal government. Remember. It is better to put as big a down payment as possible to save you interest charges.

You might want to use an RRSP to save for the down payment. The Home Buyers’ Plan (HBP) allows you to take up to $25,000 from your RRSP for a down payment on your first home.

Q.2. What about a credit check?

To qualify for a Canadian mortgage you will have to pass a credit check. This will involve a check on: your loans, credit cards and other debts; your personal data such as name, social insurance number and date of birth; bank records; current and past employers; collection agency records.

Q.3. What is the home buying process?

The first step in buying your new Canadian home is an offer of purchase. This is preferably done by a realtor or lawyer on your behalf. This is usually followed by a series of offers and counter-offers which hopefully results in a successful negotiation and a completion of sale. Obtaining a mortgage is now the priority.