Home purchase mortgage

Lenderoo is here to help get you the best home purchase mortgage. We shop over 57 lenders to get you the best rate!

First-time home buyers see property

What is a home purchase mortgage?

A mortgage is a loan that uses the property that you’re buying as collateral. This means that if a payment is missed, the lender can legally take possession of the property.

When buying a new home, you need to provide a down payment, which comes out of your personal savings. The remainder of the home price is covered by a mortgage loan. A mortgage is exactly what you need to finance the home you want if you’re not loaded with cash.

Home purchase mortgage lenders

Not all lenders are the same. Find the right home purchase mortgage lender that offers the best interest rates with conditions that meet your personal and financial situation.

Steps to getting a home purchase mortgage

Getting a mortgage to finance your home is a crucial part of the homeownership journey. See our step-by-step guide to the home purchase mortgage process:

1. Determine your budget – Calculate your finances and determine how much you can realistically afford. Consider your gross annual income, total debts, down-payment savings, debt-to-income ratio, and more.

2. Get pre-approved – Apply for a mortgage pre-approval from a lender, indicating how much you could borrow and the interest rates you will be offered.

3. Start house hunting – Search for your perfect neighbourhood and the home of your dreams.

4. Qualify for a mortgage – Once you find the home of your dreams, provide the lender with its details to prove that you can afford it.

5. Confirm your down payment – Your down payment has to come from your own savings and you need to verify of the source of funds.

6. Finalize your paperwork – Negotiate the terms and conditions of your mortgage contract with your lawyer. Read the contract carefully and sign it to get your mortgage.

7. Get your keys! – As soon as the mortgage is finalized and the conditions of the purchase and sales agreement are met, the keys are yours.

Home purchase mortgage frequently asked questions

How much do I need for a down payment?

Typically, the down payment is equal to 20% of the property’s value. The minimum down payment amount is 5%, but it is not recommended since mortgage insurance would be required. The larger the down payment, the less money you will have to borrow, lowering the monthly mortgage payments.

How does my credit score affect my mortgage?

Yes, your credit score affects your mortgage. Specifically, they determine the interest rate on your mortgage. With a high credit score, you’ll likely get a lower interest rate because the lender sees that you’re trustworthy. On the other hand, with a low credit score, you’ll likely be offered a mortgage with a higher interest rate.

Should I get a fixed or a variable rate?

It would depend on your personal preferences. Fixed interest rates are the more stable option, but have slightly higher rates. On the other hand, variable-rate mortgages can be risky because if interest rates increase, more of your payment will be put towards the interest.

What other fees are there to consider?

When buying a new property, your mortgage will include closing costs, such as land transfer taxes, legal fees, home inspection fees, appraisal fees, etc. Your mortgage contract will likely also state the penalties and fees associated with breaking it early.

Are there benefits for first time home buyers?

For first time buyers, the Government of Canada offers a few homeownership tax credits and benefits. This includes the First-Time Home Buyer Incentive, the Home Buyers’ Amount, the Home Buyers’ Plan, and the GST/HST New Housing Rebate.

How long does it take?

In a normal market, getting a mortgage usually takes around a month. During busy months, it can take longer. Or, if the lender finds any financial issues when reviewing your application, the process can become slower and more complicated.

Are you ready to
get started?

Whether you’re applying for a mortgage pre-approval or financing for your second home, Lenderoo makes it easy to compare your options from coast to coast.

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