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Common Home Buyer Questions, Answered

Common Home Buyer Questions, Answered

Whether you’re setting out to purchase your first home or are making another move in the ever-changing real estate market, you likely have some questions about the process. As an experienced real estate agent, I rounded up the most commonly asked questions to get you started. 

I’m thinking about buying my first home, where do I start?
The first step is to get pre-approved for a mortgage. This will ensure you know what your budget is for a home and will lock you in at the current interest rate for up to 120 days. Connect with a trusted mortgage broker to help you with all your mortgage needs and a real estate agent who can help you find homes to view based on your criteria. 

Can I buy a home with no down payment?
While the general rule of thumb is that you need a minimum of 5% of the purchase price as a down payment on a home, your unique circumstance may differ. In Canada, there is a sliding scale down payment based on the purchase price of a home, as well as many buyers incentives for real estate. Be sure to research your financial options, in particular, if you are a first-time buyer, there may be assistance programs and incentives available to you. 

What is the mortgage stress test?
For uninsured mortgages in 2016, and later all mortgages in 2018, mortgage rules require that all applicants must qualify at a rate that is 2% higher than the contracted rate or the Bank of Canada’s five-year benchmark rate. This is to ensure that borrowers will be able to make their mortgage payments should interest rates increase.

Is there a “best“ time of year to buy a home, cost-wise?
There really is no straight-forward answer to this as home prices depend on a variety of factors including supply and demand, housing market conditions, location, upgrades and more. Another important thing to consider is how long a house has been on the market, as this will be the biggest indicator of your negotiating power. 

Does having a high credit score get you a better mortgage rate?
According to the Government of Canada, your credit rating “indicates the risk you represent for lenders, compared with other consumers… The credit reporting agencies (Equifax and TransUnion) use a scale from 300 to 900. The higher your score, the lower the risk for the lender.”  The minimum credit score for traditional mortgage products is 680, however a higher rating will typically secure a better mortgage rate and a lower score may need alternative lending options.

Do not hesitate to reach out with your home buying questions, no question is too big or too small. I also have connections to many professionals in the industry to help get you the answers you need!

Craig Shantz
RE/MAX Shuswap Realty⠀


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