First-time home buyer

Making the leap: buying your first home

Be prepared for one of the biggest decisions — and investments — you can make. Explore what to consider before you buy, tips on saving for your down payment, and what you need to know before buying your home.

Tips for home buying success

Before you buy
Purchasing your first home is an exciting and affirming milestone for many people, though it should be no surprise that with such a large financial obligation, there are many elements the prospective first time home buyer should reflect on and understand before making an offer: Is your current financial situation stable? Can you accommodate the up-front home buying costs, including a down payment, closing costs and property tax?

Are you aware of the costs and responsibilities that regularly accompany home ownership? This includes, but is not limited to, regular maintenance, home insurance, utilities, condo fees and major repairs (e.g., roof replacement, landscaping,renovations). This is all on top of regular mortgage payments and property taxes.

What are your current spending habits like? How much are you spending now and what is your current debt and savings situation? A CWB Account Manager can work with you to understand what you can afford on a monthly basis and help forecast what your budget looks like as a home owner.
Saving for your down payment

Once you’ve determined that purchasing a home fits with your current financial picture, it’s crucial to take the proper steps to save for a down payment. The size of your down payment will make a large impact on your total payment over the duration of your mortgage.

Understand how your down payment will affect additional costs. For example, by making a 20% down payment, you’ll avoid the cost of purchasing mortgage loan insurance. 

It’s important to remember that there are additional expenses for first time home buyers to consider beyond just a down payment, including home inspections, taxes, legal fees and more, so take the time to budget accordingly.

With the proper budgeting, saving for a down payment can be worked into your monthly routine, with even modest deposits growing to impressive amounts with enough time and the right tools. The size of the mortgage that you can afford is dependent upon multiple factors, including your household gross monthly income, monthly housing costs and other debt you have taken on.

You can give yourself a good estimation of your monthly payments, compare mortgage types and determine whether you are better off renting of buying by using the suite of available CWB mortgage calculator tools.

Buying your home

Once you’ve saved for a down payment, know what to prepare for when it comes to making an offer and finding a mortgage that fits your life. When the home of your dreams comes onto the market, it can be important to act fast. To ensure you’re prepared, consider getting a pre-approval, which will qualify you to sellers and allow you to make an offer quickly and easily.

Make home inspection a part of any offer. Before finalizing any deal, know everything possible about the current condition of the home and what repairs may be needed. If possible, research and decide upon a home inspector prior to your home search
When looking for a mortgage, don’t just shop for rate. Though rate dominates the conversation and will make a large impact on total costs, you should consider any personal circumstances that may require you to move after your purchase. Locking into a longer term can bring about payout penalties if a you wish to break term before the end of the mortgage.

Understand the privileges and options that come with your mortgage. What are the prepayment options? Can you increase the payment over the course of the term? Are there portability options if you decided to move or upgrade?

See if a rate hold is available before you begin the application process. This can be advantageous in an increasing rate environment.

Take the time to know what payment frequency works best for you. Payment frequency plays a large part in how quickly you pay down your mortgage. Paying bi-weekly or weekly payments can reduce your pay down by four to eight years by allowing you to make an extra payment every year.

Take advantage of first time home buyers programs, including the Home Buyers’ Plan that permits you to withdraw up to $35,000 from your RRSP for the purchase of a home in Canada.

By partnering with a CWB Account Manager, you’ll have access to the expertise, support and guidance along every step of the way on your home buying journey. Get started today by contacting a CWB branch near you.