A couple on the front steps of their new home, holding up the key

Mortgage services / First-time home buyers

First-time home buyers

Start your home search with a clear mortgage plan. Speak with Puneet Mann, a Mortgage Agent Level 2 in Brampton.

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Is this you?

01Starting your home searchSee what a lender may consider before you choose a price range.

02Building your down paymentSavings, eligible FHSA or RRSP funds and family gifts can contribute.

03Buying with someone elseYour incomes and debts shape the application together.

04Returning to homeownershipSome federal programs may still treat you as a first-time buyer.

How lenders see

Lenders review your income, debts, credit and down payment. At banks, the mortgage stress test also checks affordability using a qualifying rate that is typically higher than the rate in your mortgage agreement.

Your down payment may draw on savings, a First Home Savings Account, the RRSP Home Buyers’ Plan or a non-repayable gift from family. Eligibility and documentation vary by source, so these details belong in the plan early.

Which lender fits?

A lenders: Banks and credit unionsUsually assess documented income, credit and down payment under standard criteria. A smaller down payment commonly requires mortgage loan insurance.
B lenders: Alternative lendersMay consider different income or credit circumstances. Down-payment requirements, borrowing costs and conditions vary.
C lenders: Private lendersOften offer short-term, interest-only financing at a higher cost. A realistic plan to refinance, sell or repay at the end of the term is essential.

A, B and C lending explained

The application process

Puneet’s Level 2 licence covers bank, alternative and private lending. These are the main stages of an application.

1Set your budgetGather your income, debts, savings and any family gift. Compare a lender’s qualifying amount with the mortgage payment, property taxes and other home costs you would be comfortable carrying.

2Compare mortgage optionsCompare payments, total borrowing costs, terms and conditions across lenders. A pre-approval may help plan your search, while the final decision still depends on the property and lender review.

3Prepare for closingAfter your offer is accepted, provide the documents the lender requests and review the mortgage agreement. Conditions such as an appraisal or proof of insurance may need to be met before closing.

Questions people ask

How much do I need for a down payment?

The minimum depends on the purchase price, and a lender may require more. A smaller down payment usually requires mortgage loan insurance. Budget separately for closing costs, including land transfer tax and legal fees. Eligible first-time buyers may qualify for an Ontario land transfer tax refund.

What is the mortgage stress test?

At banks, it is an affordability check using a qualifying rate that is typically higher than the rate in your mortgage agreement. It affects the amount you may qualify to borrow. Other lenders may use different qualification rules.

Can I use my FHSA or RRSP?

You may be able to use both for the same home if you meet each program’s rules. An eligible First Home Savings Account withdrawal is tax-free and does not need to be repaid. An RRSP Home Buyers’ Plan withdrawal is repaid to your RRSP over time. The programs also have different first-time-buyer eligibility rules.

Can my family help with the down payment?

A non-repayable gift from an immediate family member may form part of your down payment. Lenders commonly ask for a signed gift letter and documents showing where the funds came from. Requirements vary by lender and mortgage program.

What is a pre-approval?

It is a lender’s review of your finances before you make an offer. It may give you an estimate of the mortgage amount you could qualify for, and some pre-approvals include a rate hold. Final approval also depends on the property and the lender’s conditions.

What documents will I need?

The lender will set the final list. Common starting points include:

Photo ID for everyone applying
Proof of income, such as pay stubs and an employment letter, or business and tax records if you are self-employed
Account statements showing your down payment and closing-cost funds
A signed gift letter if family is helping
Once you have an accepted offer, the purchase agreement and property details

The lender may ask for additional documents based on your circumstances.

Ask PuneetQuestions about your first home?Get in touch with Puneet to discuss your budget, savings and plans.Get in touch