First Time Homebuyer Mortgage Checklist

Published: January 5, 2021 Last updated: March 20, 2023 at 13:36 pm

What A First Time Homebuyer Needs To Know About Getting A Mortgage

First-time home buyers are entering into the most consequential, expensive and exciting decision that most people will make in their lives (besides choosing to get married and have children). It’s a big deal, and something most have no related experience or detailed knowledge to guide them.

A big piece of the homebuying journey is understanding and selecting the right mortgage, and the right mortgage professional to help. Below, we’ve outlined a checklist to plan and prepare for your first mortgage for your first home. Click on items in the list for detailed explanations and insights.

Master Mortgage Basics

Very few first-time buyers pay for their home outright; they typically need loan financing to make that purchase. Once you save up the down payment (no less than five percent of the purchase price) you will borrow the rest with a mortgage.

Essentially, a mortgage is a loan used specifically for real estate transactions in which the property is the collateral for the loan. Because mortgages entail a large amount of money and are backed by a physical asset, they allow most people to borrow money at a relatively low-interest rate and pay it off over a specific term. Learn more »

Speak The Mortgage Lingo

There are many terms specific to mortgage financing that you may never have needed before. This A-Z homebuyers glossary will give you the confidence to negotiate all aspects of the purchase process. Learn more »

Plan Your Down Payment

To pay for your new home, you will put up a portion of the money, and your mortgage lender will make up the balance of the purchase price. The minimum required down payment is five percent of the first $500,000 of the purchase price, and if your new home costs between $500,000 and $1,000,000 you will need an additional ten percent on that portion. Creative solutions also exist for tricky housing markets. A thorough review of your finances with a mortgage specialist will assist you in assessing the best course of action. Learn more »

Review Your Credit History

No one wants to find surprises in their credit history when it is time to apply for a mortgage. If the clock is ticking on a conditional offer to purchase, it can be very stressful trying to clear up errors at the last minute, and it can typically take up to a few weeks to resolve. The clear solution is to front-load your credit history review in tandem with your pre-approval process. It is never (ever) better not to know! Learn more »

Get Pre-Approved

Get pre-approved long before you actually think you might want to buy a house. Start talking to your preferred lender or mortgage broker/agent early in the process. Pre-approved means you’re conditionally approved for a mortgage – up to a certain limit – in advance of actually buying a house. As part of the pre-approval process, most lenders will want to do a “hard inquiry” of your credit score. An experienced mortgage professional can review your personal copy of your credit report, together with all the documents a lender is going to ask for, and will be able to offer a very strong opinion on what you will qualify for. Learn more »

Choose Your Interest Rate

Of course, you want a mortgage with the most competitive rate, but there are other important considerations which should go into your mortgage selection process besides the interest rate. Understanding fixed versus variable rates, as well as some of the factors that can influence a rate, like your credit history or your income to name only two. In the end, it is not simply a matter of making the technically “best financial decision”, it is also key that you end up with a product you are comfortable with, and that is sustainable should rate fluctuations occur during your term. Learn more »

Understand High Ratio Mortgages And Mortgage Insurance

Every mortgage in Canada with a down payment of less than twenty percent is subject to mortgage default insurance, sometimes referred to as high-ratio mortgage insurance. This insurance doesn’t protect you – it protects the lender (your financial institution). The government promotes this “default insurance” to prevent a sudden surge in home foreclosures from destroying the Canadian economy. Learn more »

Apply For Government Incentives

The Government of Canada has programs in place to help you buy a home. In addition to various federal and provincial tax credits, there are even municipal first-time homebuyer grants available in some cities. Naturally, there are conditions and qualifying factors, but taking the time to research and apply for incentives that could put dollars back into your pocket is well worth it. Learn more »

Build Your Homebuying Team

The complexity of home buying is intimidating, to say the least. You are not expected to, and shouldn’t try to do it all! In order to navigate the process from start to finish, you will need the skills and insights of industry professionals. The powerful combo of Realtor, Mortgage Broker and Real Estate Lawyer will position you for smooth transitioning through the multiple steps involved in buying a home. And, if things do get a little bumpy along the way, these are the three people you want on your team. Learn more »

Select The Right Mortgage

There is no one-size-fits-all mortgage. Every buyer is different and comes with their own dreams, goals and unique circumstances. First, you must ascertain what type of mortgage you need, and what kind of mortgage client you are. Only then, can you select the best rate possible? A reputable mortgage specialist does not believe the number one factor is the interest rate and will guide you towards selecting the right mortgage for you. Learn more »

Be Aware Of Prepayment Penalties

When breaking your mortgage contract early, usually because of a refinance or the sale of your home, you will, unfortunately, have to pay your lender a penalty called a prepayment penalty. There is no standard way to calculate prepayment penalties in the mortgage industry, so it is very important to be informed upfront. If you score a dream job on the opposite side of Canada, realize you over-purchased for your budget or simply want to shop around for a better rate mid-contract, it is a good thing to know what you will be charged for exiting your mortgage contract early. Learn more »

Know Your One-Time Closing Costs

Many first time buyers focus so much on the down payment, that not enough consideration is given to the multiple one-time closing costs which you can expect to pay on the day you collect the keys from your lawyer. These costs can certainly add up, and while the implication for your budget is a one-time occurrence, you want to be fully financially prepared at the offset of your homeownership journey. Learn more »

Follow These 7 Steps To Buying A Home

Knowing where to start, and all the steps in between can be mind-boggling. And since this may be one of your largest lifetime purchases, it can get pretty stressful. These seven distilled steps to buying a home help put some simplified structure around the progression from pre-approval through to closing day. Learn more »

Anticipate What Can Go Wrong

It pays, not just financially, but emotionally, to know what can go wrong when you are at the offset of purchasing a home. Often there are ways to correct errors before they affect your mortgage viability, and if not, ASKROSS could provide valuable solutions and even alternative lending options. Learn more »

Top 9 Best Mortgage Brokers In Toronto

“Ross Taylor Mortgages is a company that’s dedicated to providing their clients with the most suitable mortgage or credit solutions they may need. Alongside their quality services is their top-notch customer service, which ensures a pleasant experience when working with their agents. 

To further help their clients, Ross Taylor Mortgages has various articles on his website regarding mortgaging and other financial matters. This client-focused approach is one of the main reasons why they continue serving clients excellent results.”

– Addison Lee

​Ross Taylor
One of Toronto/GTA's Most Trusted and Knowledgable Mortgage Agents

Ross Taylor is recognized by his peers as one of Canada's pre-eminent difficult mortgage specialists. His ASKROSS blog and column ​ in Canadian Mortgage Trends are focused on the intersection between mortgage financing and personal credit.

With unique dual certification as a licensed credit counselor and mortgage agent, Ross's insights are valued by mortgage professionals and homebuyers alike.

If you have questions about anything financial or mortgage-related, please contact [email protected]. Ross answers everyone personally.

​For more information, visit About Ross Taylor.