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First Time Home Owners

First Time Home Owners

At Heritage Savings we love making it possible for Members to purchase their first home.

Purchasing your first home is very exciting. It can also be a bit confusing. We suggest taking a moment to read Mortgage Basics to help you understand the different types of mortgages on the market, options you have for repayment, and other items of interest.
Pre-arranging Your Mortgage

If this is your first time purchasing a home, you may want to drop by a branch to pre-arrange your mortgage. Basically this allows you to:

* Determine the amount of debt you can carry.
* Understand payment options.
* Enjoy a guaranteed rate for 90 days. We guarantee this rate even if rates rise. (Of course you get a lower rate should rates drop.)

To pre-arrange your mortgage you will need to see a Member Consultant who will ask you a number of questions. These will include questions about your employment history, income, savings, investments, debts and other financial obligations. These questions are asked so that we can determine with you the amount of debt that you could carry in a mortgage.

By pre-arranging your mortgage, you can go out and shop for the home of your dreams with confidence.
House Hunting

It can be a little overwhelming when you start shopping for your first home. There are townhouses, duplexes and single family homes; single story, two story and raised bungelows. Once you've got a general idea of what type of home you are looking for and begin going through a few open houses or showing, how do you keep it all straight? Did the first house have 1 bathroom or 2? Was there a dining room? Was the basement finished? A checklist is a great way to keep everything straight and help you narrow down the choices.
The Offer to Purchase

When you make an offer to purchase a home (usually with the assistance of a real-estate agent or lawyer), experience has taught us that there are a few steps that are usually worth taking. We suggest...

* Always have a home inspection by an independent, qualified agent. This is to be sure that the home is in the condition it appears to be in.
* Make your offer conditional on financing.
* Try to obtain an existing survey or have the current owners provide a survey. You will need a survey later in the mortgage process.
* Consider talking to your lawyer first regarding particular details that are relevant to the offer to purchase.

Applying For A Mortgage

After you've decided on the home you want to purchase, a mortgage can feel like an afterthought. While not as much fun as visiting open houses and picking paint colour, we try to make the experience of applying for a mortgage as easy as possible.

Here are the types of questions you will be asked when applying for a mortgage and some of the documentation you may be required to provide.

* What is your current job?
* How long you have been employed?
* What is your income?
* You will be required to provide income verification. Generally a pay stub or T-4 slip is adequate. For self-employed persons, you will need to bring in financial statements or a net worth statement.
* What savings, investments and RRSPs do you own?
* What other debt and other obligations will you need to carry?
* Do you require CMHC financing? (That is, will your down payment be less than 25% of the purchase price)

You will also need:

* A copy of the Offer to Purchase.
* Appraisal or title insurance.
* A property survey.

Mortgage Protection

No one likes to think about an untimely death or an accident that could leave you unable to work. Yet once you own a home, you need to consider how your debt would impact your loved ones or your estate should you be unable to make your payments.
Buying A Mortgage with Less than a 20% Down Payment

A conventional mortgage is purchased with a 20% down payment. When you want to finance more than 80% of purchase price of your home (a down payment less than 20%), this is referred to as a high ratio mortgage. A high ratio mortgage must be insured through the Canada Mortgage and Housing Corporation (CMHC).
Cash Back and 0% Down Mortgage

Ideally, the more money are you able to contribute to your down payment, the lower your monthly payments will be. Sometimes, however, it makes sense to put down less. A Heritage Savings Member Consultant can help you select the right down payment for your situation. If you have less than 5% of the purchase price available, we can help you pay for the down payment and cover other expenses such as closing costs with our Cash Back and 0% down mortgage. Ask us which option is the right choice for you.

Heritage Savings & Credit Union Inc.
318 Merritt Ave
Chatham Ontario
N7M 3G1
tel: 519.351.0600
fax: 519.351.0660

Copyright © 2009 Heritage Savings Credit Union. All rights reserved.