How Do I Buy My First Home? Buying a home is an exciting time! You’re about to take a big step so you’ll definitely need some advice from a mortgage professional. With an unbiased viewpoint, a mortgage broker is able to pick and choose the best products available from multiple channels. With access to sources like Banks, Mortgage Companies & Private Lenders we’ll help you find the most competitive rates and best mortgage options to help you buy your dream home, with a first time home buyer mortgage. Our best advice? Begin with a conversation with our trained mortgage professionals located in Burlington, Ontario since 1993. Things to Consider Before Purchasing Your First Home Mortgage Options Documentation Closing Costs Important Points Mortgage options as opposed to rate. Make sure you select the right mortgage for your current situation and future goals, especially if you plan on selling and moving up. Don’t only focus on the rate. Many lenders can afford to offer the lowest rate by adding penalties and fees for breaking their mortgages.Ensure you fully understand the mortgage products available in the marketplace and what product would be best suited to your family’s financial circumstances. Getting the wrong mortgage can be detrimental to your long-term finances. Cavet Emptor (Buyer Beware)! Know what documentation you need to provide to get a mortgage approval.Employee: T4’s, Paystubs, Letter of Employment, Government Issued Identification, Down payment Verification, Gift Letter, RRSP Withdrawal, Agreement of Purchase and Sale, among others.Self Employed: Financial Statements Have adequate information about what costs exist over and above your down payment.These are expenses accompanying buying of a property, which is added to the purchase price. Closing costs include transfer fees, legal fees, and disbursements and are payable on the day the mortgage closes. Know what you can afford before house hunting.Be aware of the amortization period.Know the appropriate mortgage term.Ensure all credit approval documentation is in place sooner rather than later.Take note of the frequency of payment.Identify the applicable mortgage type (conventional or high-ratio mortgage).Know what documentation is required for different income types (e.g., salaried or self-employed).Have a detailed breakdown of costs and fees. What is Land Transfer Tax? Provincial Land Transfer Tax Municipal Land Transfer Tax All provinces, with the exception of Alberta and Saskatchewan, charge a land transfer tax when a property is purchased. This is called a provincial land transfer tax. In Alberta and Saskatchewan, the provincial government charges a much smaller registration fee Instead. Toronto Land Transfer Tax is added on top of the Ontario Land Transfer Tax. Land transfer taxes are normally calculated as a percentage of the property value, and are to be paid up front and can be quite significant, especially on higher priced properties. Debt Servicing Ratios Gross Debt Servicing Ratio 35% Max Total Debt Servicing Ratio 42% Max Gross Debt Service Ratio or GDS is calculated by adding the costs of the Principal + Interest + Taxes + Heat (P.I.T.H.) divided by the Gross Annual Income of the applicant(s). This ratio is used for Underwriters to measure the cost to carry the property in question. If your mortgage is default insured (less than 20% down payment). It is required that this ratio be no greater than 35% The percentage of gross monthly income required to cover the monthly housing payments (P.I.T.H) plus all other debts that appear on your credit report, such as car loans, credit cards, lines of credit and phone bills.