First-Time Home Buyers: what you actually need to know.

If your down payment is less than 20% of the purchase price, your mortgage is considered high-ratio and must be insured (most commonly through CMHC, Sagen, or Canada Guaranty). Insured mortgages come with stricter rules that protect the lender and, in turn, give you access to better rates.

• Stress test: You qualify at the higher of your contract rate + 2% or the Bank of Canada qualifying rate.
• Debt ratios: Generally 39% GDS / 44% TDS.
• Owner-occupied, 1–4 units for insured purchases.
• Minimum credit score of 650 for most insured programs.
• The lender's appraisal must support the purchase price. If it comes in low, you cover the shortfall.

Plan for 2–2.5% of the purchase price on top of your down payment to cover closing. That typically includes:

• Land transfer tax (provincial, plus municipal in Toronto)
• Legal fees and disbursements
• Appraisal
• Property tax and utility adjustments to the seller
• PST on insurer premium (for high-ratio mortgages)
• Mortgage registration
• Title insurance
• A ~$1,000 buffer for miscellaneous costs

For new builds, have your lawyer review the offer and ensure closing costs are capped. For condos, ask about special assessments, fee increases, and pending lawsuits before waiving any conditions.

• Pull your reports from both Equifax and TransUnion. Dispute any errors.
• Pay every bill on time. Keep credit-card balances low (under ~30% of limit).
• Don't open new credit unless your broker says it's okay.
• Don't lower limits or close accounts during the mortgage process.
• Aim for at least two trade lines, $2K limit each, for 2+ years.

• Gifted funds must come from family (parent, sibling, grandparent) and be documented with a gift letter.
• Minimize transfers between accounts in the 90 days before close. Lenders want to see a clean trail.
• Out-of-country funds need to be in a Canadian account 30–90 days before closing, depending on the lender.
• RRSP funds for the HBP must have been in the account for 90 days. Exceptions exist; ask first.
• Never redact, alter, or void anything on a bank statement you submit. PDFs only.

• Get pre-approved before you start looking. Walking into an offer with a pre-approval is a different experience.
• Don't take on new debt after pre-approval. It can change your approval.
• Confirm your lawyer is licensed for real estate and clean of disciplinary actions.
• Build a full team: mortgage broker, realtor, lawyer, home inspector.
• If a co-signer is involved, consider 99/1% tenants-in-common ownership.
• Buying a tenanted property? Get vacant occupancy in the offer.
• Submit all documents as PDFs. It speeds everything up.