As the real estate market in Alberta continues to improve, first-time homebuyers are hoping to qualify for mortgages and get out of paying rent. The first step in buying a home is getting pre-qualified for a mortgage so you know exactly how much money you can spend, says Edmonton real estate agent Judy Clare-Packer.
“The trick is to try not to borrow your maximum so you leave room for renovations if need be,” says the 20-year real estate veteran. Your bank will require your last two years of income tax assessments showing what your gross income is as well as details on any outstanding loans or credit card balances you carry. They will also generally ask for a letter from your employer indicating you have a long term, full-time job with them.
“Always talk to more than one bank and let them know that you’re shopping around to get the best interest rate,” Clare-Packer suggests.
Mark Mahabir recently applied for and received a mortgage from Scotiabank. Mahabir says as a first-time homebuyer, the bank wanted him to put five per cent of the purchase price down as a deposit but the chartered accountant had planned ahead. “You have to put down five per cent minimum,” Mahabir says. “But if you put down more than 20 per cent you avoid an insurance charge from the bank.”
Once Mahabir and his girlfriend were pre-approved for a mortgage they were able to start looking around for homes with an idea of how much they would be able to spend. “The market was pretty good to buy,” Mahabir says. “Interest rates are good right now and you never know what the market’s going to do so I thought now was a good time to get into the market before the prices start going up again.”
The Canada Mortgage and Housing Corporation (CMHC) is Canada’s national housing agency. On their site: cmhc.ca, you’ll find plenty of tools on how to buy a new home and more info on financing.
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