4 Things First-Time Homebuyers Need to Know

There’s no measure for success quite as recognizable as home ownership. It’s a source of great pride for many and a dream for most. It’s also a great way to build long-term wealth and one of the smartest things you can do with your money.

Homeownership is a significant accomplishment that comes with a lot of responsibility—and a lot of paperwork. So, before you jump into the world of homebuying, there are a few things you need to know.

#1: You Should Be Ready to Commit

When buying a home, you’re not just committing to the property—you’re also committing to the neighbourhood, the commute, and a mortgage loan. Especially with the latter, you’re looking at a 15- to 30-year commitment, so it’s essential to ensure you’re ready for that kind of long-term financial responsibility.

If you’re not sure if you’re ready to commit, ask yourself a few questions:

• Do you have a steady job?
• Do you plan on staying in the same area for at least the next five years?
• Are you comfortable making monthly payments that could increase if interest rates go up?
• Do you have a good credit score?
• Do you have enough saved for a down payment and closing costs?

If any of these questions above give you pause, it might be best to wait a little longer before buying a home.

#2: Don’t Settle for the First Mortgage Offered to You

A mortgage is a big financial undertaking, so you want to ensure you’re getting the best possible terms. That’s why shopping around and comparing offers from different lenders is vital.

Private home mortgage loans can vary widely regarding interest rates, fees, and other conditions, so it pays to do your research. And don’t just take the word of the lender—read the fine print carefully to ensure you fully understand all the terms and conditions.

#3: There are Government Programs That Can Help

Montreal’s government offers subsidy programs to help with the down payment and other costs associated with buying a home. For example, the Home Purchase Assistance Program (HAP) offers up to $15,000 subsidies for qualified buyers.

Check the program’s website or speak to a mortgage broker to see if you qualify.

#4: Self-Employed? You Can Still Get a Mortgage

With the ongoing gig economy, more and more people are self-employed. And while that comes with a lot of freedom and flexibility, getting a private home mortgage loan can be more challenging.

That’s because lenders typically like to see a steady income from employment rather than variable income from freelancing or other gigs. But that doesn’t mean it’s impossible to get a mortgage if you’re self-employed—it just might take a little bit more work.

The private mortgage loan, in particular, serves as a non-traditional mortgage loan for self-employed individuals. The underwriting process is a bit different, and you’ll likely need to provide more documentation to prove your income.

Don’t Be Afraid to Ask for Help

Deciding to be a homeowner is a big decision, but it doesn’t have to be scary. If you do your research and work with a qualified professional, you’ll be on your way to homeownership in no time. If you have any questions, Nord-Est is here to help. We’re experts in private home mortgage loans and can help you find the right loan for your unique situation. Contact us today to get started.