Posted: 1 Apr '20

Qualifying for a First Time Home Buyer Loan

Qualifying for a First Time Home Buyer Loan

Buying your first home is a big step. When you are ready to buy your first home, it is wise to work with an experienced professional to guide you through the process and help you to qualify for a first time home buyer loan. When you meet with a mortgage broker, you will then have a good idea of where you are financially and what it takes to qualify for a mortgage. If you aren’t sure, don’t hesitate to call us – we are always happy to help first time home buyers get on the path to home ownership! Contact us to get started getting your first time home buyer loan.

Here are some things to think about before meeting with a mortgage broker to start the pre-approval process.

Do You Have Savings Set Aside?

When purchasing a home, a downpayment is required. This is a percentage of the overall price of the home you are purchasing and is deducted from the total mortgage amount. A minimum downpayment of 5% is required. For example, if the purchase price of your home is $300,000, you will need a minimum downpayment of $15,000.

If you haven’t started saving, it is still worth your time to talk to a mortgage broker and see what other options are available to you.

In addition to your downpayment, you should have around $2000 set aside for closing costs (inspection, lawyer).

Can You Afford the Monthly Costs?

Buying a home means no more rent! But remember home ownership means replacing rent costs with a mortgage payment, homeowner’s insurance, property taxes, and utilities. Do some research to get a general idea of what those costs will be. Do you have room for these costs with your income and spending habits?

Could You Be Denied for a Mortgage?

There are some circumstances can cause your lender to decline your first time home buyer loan. Here are the top reasons for a lender to decline your application for a mortgage:

  • too much debt
  • credit issues
  • low income

If you don’t meet the mark, your lender may be able to give you some alternative options, some of which include:

  • requesting a larger down payment
  • requiring a cosigner
  • approving you for a lower home loan amount

What Information Do You Need to Meet with a Mortgage Broker?

Any lender will want to be sure that you’ll be able to pay the loan you’re requesting. To find out if you are eligible, the lender or broker will analyze your monthly costs and total debt obligation based on your financial records.

Mortgage lenders will look at a variety of pieces of information such as your:

  • income before tax
  • total debts
  • monthly expenses
  • credit score
  • employment history

Get Pre-Approved for a First Time Home Buyer Loan

Ready to buy your first home? Need a first time home buyer loan? We at Dominion Lending Centres Mortgage Mentors are the leading mortgage lenders in Edmonton. Contact us for guidance on how to secure your first time home buyer loan today.

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