A couple being handed keys as first time home buyers with Kelowna mortgage broker

First Time Home Buyers

Matthew Jackson Mortgage Tips

Here is some great information first time home buyers should take note of.
If you are a first time home buyer this is going to be an alien and somewhat stressful process, so hopefully this sheds some light on the process and what to expect.

If you are an employee what we will request is generally a job letter and a recent pay stub. The job letter should contain your income, tenure at job, contact for bank to confirm employment, full time or part time, position and on company letterhead. There are other documents we may request depending on your job and if you work much overtime, do shift work or are on commission. The most common extra documents requested are your most recent two years personal income notice of assessments and the matching tax returns. The extra documents requested will depend on your job and how long you have been there. There are many different situations for employees but generally you need only be at a job past your probation in order for your income to be used to qualify for a mortgage.

For self-employed individuals the banks like you to have 2 years being self-employed along with two tax returns and notice of assessments. It is possible if you were in the same field of work and similar income to be less than two years self-employed and still get a mortgage. The bank will use the average of your net income for the last two years. If this is not enough to qualify for the purchase price you want you may qualify for a mortgage called stated income. This requires a minimum of 10% – 35% down payment.

There is much more info for qualifying as an employee and for being self-employed so it’s best if you are curious to contact me for your situation.

Down Payment:
For down payment you may either save up your own funds through work, you may be gifted from a direct relative or if you qualify you may use funds from a line of credit or credit card.
If the funds are from you saving them up, the bank likes to have a 3-month record even if the funds were saved previous to the most recent 3 months. They only want the most recent 3 months record in most cases but they can ask for more if they so choose. For being gifted it must be from your Father, Mother, Brother or Sister. Others may be considered but on a case by case basis based on your situation. In order to borrow your down payment from a line of credit there is special qualifications. The best way to qualify for this is to have credit above 680 and lower debt.

Some other useful mortgage information:

– As a first time home buyer you are exempt from the BC Property Transfer tax up to a purchase price of $475,000
– You will be eligible for a discount on your yearly property taxes as long as it is your owner-occupied home.
– You may withdraw up to $25,000 from your RSP’s tax-free per applicant for down payment and repay within 15 years
– First Time Home Buyers tax Credit, which is an income tax credit

There are many other smaller rebates or incentives but the ones above are the main ones.

Get Approved Today!

Matthew Jackson