Qualifying for a mortgage in Kelowna is possible and within reach for you. When it comes to qualifying, finding a mortgage broker near you and securing your perfect home, I’m here to help!
In this blog, I’ll go over some frequently asked questions (FAQs) about qualifying for a mortgage in Kelowna.
1. Where can a down payment come from?
When you’re ready to purchase a property, the first thing you need is a down payment. It can feel stressful when it comes to preparing that large amount of money. But, your down payment can come from a lot of places.
Firstly, it could come from your own savings or inheritance. Secondly, your down payment can be a gift from a direct family member – mother, father, sibling, grandmother, grandfather. Thirdly, if you’re a first-time home buyer, you are able to use your RRSPs towards the down payment. More on being a first time home buyer below.
2. What is the minimum down payment on a property in BC?
The minimum down payment for a property in British Columbia is 5% on the first $500,000. For homes between 500,000 and $999,999, you need 5% of the first $500,000 and 10% of the value over $500,000.
Example: If the property is $700,000, it would be 5% on the first $500,000 and then 10% on the remaining $200,000.
If you’re looking at a property over $1 million, you need 20% of the purchase price, with a sliding scale on any portion over $1 million. Some lenders want 50% on the portion over $1 million. Some lenders, area-depending, will allow a down payment of 20% up to a purchase price of $1.5 million.
3. Does this amount change if you’re self-employed?
If you’re self-employed and qualify normally, your down payment amounts are the same as above. You’ll be able to do as little as 5% down. But, if you choose to go through a stated income program, you will have to have 10% down payment prepared.
4. What’s the benefit of being a first-time home buyer?
When you’re getting a mortgage, there’s a big benefit to being a first time home buyer. One big cost when buying a home is the property transfer tax. Luckily for first time home buyers, that cost can be reduced or eliminated. To have this happen, the property must:
- only be used as your principal residence.
- have a fair market value of $500,000 or less.
- be 0.5 hectares (1.24 acres) or smaller.
You may qualify for a partial exemption from the tax if the property:
- has a fair market value less than $525,000.
- is larger than 0.5 hectares.
- has another building on the property, other than the principal residence.
Property Transfer Tax reduction or elimination is just one fantastic benefit of being a first time home buyer. For more benefits, check out my blog post on the 6 benefits of being a first time home buyer.
5. What are the amortization lengths for a mortgage in Kelowna?
When it comes to amortization lengths, there are two common ones. If you have less than 20% down, the amortization length will be up to 25 years. For 20% or more, the amortization length is up to 30 years.
6. Should I work with a bank or a mortgage broker?
The main difference is that at a bank you’d be working with a mortgage specialist. This person doesn’t have to have a mortgage license. They also only represent the products their financial institution offers.
When you work with a broker, like me, you’ll be working with a mortgage broker. A broker has to receive their license and renew it every two years. In addition to being licensed, a broker has access to several of the main financial institutions, plus many other broker specific lenders. This means that I am able to shop around the different banks to find the best rate and product possible for you.
If you were to use a mortgage specialist at a bank, they only have access to their institution’s rates and are not able to shop around for the best rates coming from other banks.
I’ve written a blog post that shares all of the other reasons why you should choose a mortgage broker. You can give that a read to learn more.
7. What if I don’t qualify for a mortgage?
If you don’t qualify right away for a mortgage, don’t fret, it’s not the end of the road for you. If you don’t qualify with your one bank, reach out to me and we can see if you’d be approved at a different lender. Then, if no A lender approves you, there are B lenders as well as private lenders we can try.
Your rate would be higher, but there’s a greater possibility of being approved. This type of situation needs a hands-on approach. So, please reach out to me today to discuss your situation.
8. How do I get a mortgage in Kelowna?
The final and most important of our mortgage FAQs! If you’re ready to get a mortgage in Kelowna, reach out to me today. I will go over your situation and learn more about you. Once we do that, I’ll work on getting you approved for a mortgage with the best possible rate.
You can get started by filling out my pre-approval application on my website, replying to the blog post with the form below or giving me a call at 250-826-3111. I look forward to hearing from you and helping you get a mortgage in Kelowna!