So you want to buy your first home, do you? Well, first you should continue your research on the best home buying options that are available for first time buyers in Ontario. It is probably one of the best decisions you could make, and this list below will point out some of the pros and cons of being a first time home buyer.
What do you have to lose? Absolutely nothing. What do you gain? Some expert information and tips, thus acquiring the necessary knowledge about what is good and what isn’t about being a first time home buyer in Ontario.
Surprisingly, not many people know the ins and outs of acquiring a first-time mortgage. For those that don’t, this information will suit your fancy just right.
The Pros
- If you are a first time loan borrower, then you will automatically get offered a low down payment and reduced interest, combined with limited fees, as well as the possibility of deferring your payments.
- Lenders are insured against potential defaults
- Limited liability to meet high interest and payment fees, giving you lower interest rates
- You can apply for this loan even if your credit score is not high enough to meet the requirements of other lenders
- Lower interest, with a large enough down payment
The Cons
- The minimum required credit score is 600 to be apply for a first time buyer’s loan and must be combined with at least a 5 % down payment
- Often may decline an application without the credit rating of 600 or higher for a first time buyer loan even with a payment of 5% down (really not everyone has a good credit rating, let’s be realistic)
- Full documentation and proof of income must be provided at the time of application as well as all assets that you have
- Higher mortgage insurance requirements than other lenders
- Loan applicants must meet the debt-to-income ratio which is 41%-43% of your gross income
- Don’t count on buying an expensive home in the rich area of the city you live in because the probability of being approved in doubtful
- “National ceiling loan-limit” of $625,000 for most areas
- The house you purchase must be your primary place of residence
Although there are lots of cons for first time home loan applicants, improving your credit score and improving your debt-to-income ratio will help to put you in the right position to make your dream a reality. Want to learn how to get there? Contact our mortgage agents for more information and advice on your next steps.