Mortgages for First-Time Home Buyers in Calgary

The Mortgage Process with The SPIRE Team

1. The first step in the process is for us to collect as much helpful information as possible. It's our job to really make sure that we understand your current financial situation. We start that process with a quick 15 minute discovery call. We'll want to know what you do for work, what you have saved for a down payment and what ideas you have about purchasing a home.
   
   
2. After our call, we'll send you a link to our online application. The application is the safest way to collect your personal information like your Full Name, Birthday, Social Insurance Number, Address etc. That email will also contain a list of important documents that you should start preparing.
   
   
3. After we receive your application we will send you like from our online portal and a reminder list about the documents required. This link is the fastest, easiest and most secure way to use us your documentation. Snap a photo from your phone or drag and drop documents from your email or desktop! If this doesn't work for you, we're also happy to receive documents via, email, fax or in person!
   
   
4. Once the application and documents have been received, you will receive and official "pre approval" email from us outlining the details of your mortgage pre approval. The only conditions of the approval remaining could be related to the purchase of your home. A home appraisal for example. You are now ready to head out with your realtor and shop for a home!
   
   
5. When you write an offer on a house, we should be your first call. It's now our job to make sure that we transition your "pre approval" to a "firm mortgage approval." At this stage, if your documents are more than 30 days old, we may need to update your job letter, paystubs and down payment documents. We will speak with the realtor or builder to obtain the offer documents and property details.
   
   
6. We will submit your deal to a lender for a firm mortgage approval. Within about 72 hours, we will receive a "conditional mortgage commitment." We might need a few more documents at this time and there is potential that the property will need to be appraised. Ususally it takes about 5-7 business to meet all the lenders conditions.
   
   
7. Once we've satisfied the conditions of your conditional mortgage commitment, you are able to waive your "condition of financing" and firm the purchase of your new home! Now it's time to prepare for the move! Reminder, you cannot make major purchases using credit prior to your closing date!

Should I Buy a Condo? Condo vs Single Family Home

We are asked all the time if we think it is a good idea to purchase a condo or a single family home. Here is the truth, there is a time and a place for both, but generally, if you're able to stretch to that single family home number, you're able to put more money back in your pocket each month.

If you buy a house, you will be responsible for paying all expenses related to owning and maintaining your property, including the mortgage, property taxes, utilities, insurance, house and yard maintenance and any repairs or renovations. You'll want to have an emergency fund set aside for problems with things like the furnace or roof.

If you buy a condo, you will own the interior space of your unit and in some cases a parking space. Common areas and outdoor space will be owned in common with other owners in your building. You will pay a monthly condo/maintenance fee, which can cover items like heat, hydro, water, pest control, landscaping, building insurance and miscellaneous amenities. A portion of this fee will go into a reserve fund to cover major repairs and upgrades to the building, such as the roof or elevators. In most cases, you (and the other unit owners) will also have to pay a one-time special assessment for “emergency” repairs not covered by the condo fee.

In the example in the PDF, we'll explore a home purchase for a client with a total household income of $62,000 per year and no other debt. Here are the qualification numbers for both a single family home and a condo.

The key difference is that the mortgage paydown, or the "money back in your pocket" at the end of the year is much greater with the purchase of a single family home. That being said, it's important to make sure that you're taking good care of your asset, the home, and putting away a little bit of money each month in a contingency fund.

Connect with us to run the numbers and figure out what purchase options are best for your personal situation!

• Download the Should I buy a Condo to learn more.

Purchase Plus Improvements Mortgage

A Purchase Plus Improvements Mortgage, allows qualified purchasers to buy a home or condo and include a Renovation Allowance, even with as little as 5% down.

STEP 1: Obtain a mortgage pre-approval from Spire Mortgage Team, to determine your maximum approval amount.

STEP 2: You must find a home and have a general idea of what renovations will be completed at what cost to you. The purchase price plus the renovation cost cannot exceed your maximum approval amount. You will be required to provide the lender with a written quote, outlining the work to be completed and the cost to do it. Pro tip: Do not include chattels, waste costs or demolition in the quote.

STEP 3: Once your offer is accepted we will have the lender approve the mortgage with the cost of the renovations included in the mortgage.

STEP 4: Once you take possession of your home, you can begin the renovations. The Lender will instruct the Solicitor to "hold" the Renovation funds in trust, until the lender confirms the work has been completed.

STEP 5: The lender will receive the inspection report from the appraiser and validate that the work has been completed. They will instruct the lawyer to release the funds to you, so that you are able to pay the contractor.

Download the Purchase Plus Improvements PDF

New To Canada Mortgage and Lending Options

Qualified homebuyers who have immigrated or relocated to Canada within the last 5 years are eligible to purchase a property with as little as a 5% down payment.

Eligible Properties for purchase include single family homes with up to 2 suites. (Note: clients are required to live in one of the suites).

Minimum Downpayment Required: 5% of purchase price. (Note: 5% needs to come from borrowers own resources, additional can be a gift)

Clients are required to provide the following:

• Proof of Employment: employment letter with an overview of your salary and employment status.
• Proof of down payment: bank or investment statements showing 90 days history on the down payment funds.
• Proof of Acceptable Credit can be provided by the following: Landlord reference letter and 12 months bank statements, Utility Bills, Telephone bills, Cable bills, Insurance payments
• A Firm Purchase Contract

• Download the New to Canada Mortgages to learn more.

First Time Home Buyer Incentive

The First Time Home Buyer Incentive is a Government of Canada plan intended to help first time buyers purchase a home, by making it more affordable by reducing their monthly mortgage payment without increasing their down payment.

The FTHBI is a Shared Equity Mortgage meaning that the Government of Canada has a shared interest in the borrower's property. This program is available through all of the default mortgage insurance companies; CMHC, Genworth and Canada Guaranty.

Borrowers will receive an incentive in the form of an interest-free loan towards the down payment:

• 5% for the purchase of a resale property OR
• 5 or 10% for the purchase of a new construction home

In addition to the "interest free down payment loan", the Government of Canada has increased the eligible RRSP withdrawal amount from $25,000 to a maximum to $35,000.

Program Eligibility The borrower must be:

• a Canadian Citizen, Permanent Resident or Non-Permanent Resident who is legally authorized to work in Canada
• At least one borrower must be considered a FTHB based on the qualifying criteria
• Property must be owner occupied and located in Canada
• Borrowers must contribute the minimum required down payment from traditional sources (savings or gift).
• Default insurance premiums will be calculated based on the purchase price less the borrower's own down payment PLUS the FTHBI interest free loan. The "interest free down payment loan" has no monthly payment. Repayment will be:
• based on fair market value, (to be determined at the time of repayment)
• required when the property is sold or at the end of the 25-year term, whichever happens first
• Voluntary repayment of the full incentive can be made at anytime without any prepayment penalties

Application Process Requirements

• signed privacy agreement
• credit application
• signed copy of the FTHBI Program Attestation, Consent and Privacy Notice at the time of application, available on FTHBI website
• Application must be submitted on or after September 2, 2019
• Closing date must be on or after November 1, 2019
• Only High Ratio mortgages (greater than 80% Loan-to-Value) are eligible
• Borrower's annual qualifying household income can not exceed $120,000
• The combined mortgage loan amount and incentive cannot exceed four times the total annual qualifying income.

Download the First Time Home Buyer PDF here.