FIRST TIME BUYERS

Purchasing your first home is an exciting experience.  Your real estate agent will walk you through the process.

Things to remember:

YOUR CREDIT

This information is called your “credit history”.

A credit reporting agency provides information about credit history in two ways:

  • as a Credit Report
  • as a Credit Score

Your credit score is an assessment of your credit risk, at a particular point in time.

The main credit reporting agencies in Canada are:

  • TransUnion Canada
  • Equifax Canada

When determining your credit score, Equifax and TransUnion use a scale of 300 to 900.

The assessment is based on the assumption that the higher the number, the less likely you are to default on your financial commitment. Conversely, the lower the number, the more likely you are to default.

A credit score of under 450 is treated as a bad credit rating. It leads to extreme difficulty in obtaining credit from any reputable finance provider. If a provider will lend, high interest rates will be charged.

A credit score between 450 and 650 may be considered an acceptable risk by some lenders but the interest rate will be higher than for a good score. The objective must be a score of 650 or higher.

A credit score of over 700 is regarded as a good credit rating and should lead to easier access to credit and better interest rates and terms.

2. Mortgage 

MORTGAGE CALCULATOR

Virtually all mortgage professionals and lenders offer helpful calculators to help you determine how much you can afford to spend on a home based on monthly mortgage payment amounts. Your current income and debts, among other things, are taken into consideration during this process.

  1. Obtain a pre-approval. Your mortgage professional or lender representative can help you obtain a pre-approval so you know exactly what you can afford to spend on a home.
  2. Determine your down payment. Homebuyers today can make a purchase for as little as little as just a few percent down.
  3. Consider closing costs. Closing costs must be taken into account when making a home purchase. These are costs above and beyond your down payment and monthly mortgage payments, and include such things as legal fees, property tax and utility adjustment costs.
Buyers

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