Like purchasing anything in life, prior to purchasing your first home you must know how much money you can afford to spend. This process begins with your bank or financial institution and my recommendations.
As you may know already and what your bank will tell you is that the larger down payment you have the better. Do you have 5%, 20% or more to put down? If you have a 20% downpayment or more you will exempt yourself from needing High-Ratio Mortgage Insurance, typically offered by C.M.H.C or Genworth. Remember that the deposit always forms part of the purchase price and is given and held In Trust at with my Brokerage Century 21 Realty. A Bank Draft for the total amount of the deposit, is given the day after your Subject Removal and held until the purchase completes, when it then gets forwarded onto the Seller.
In British Columbia, mortgage insurance is mandatory on purchases with greater than 80% financing, relating to down payments smaller than 20%.
Once you are comfortable with your Down payment level (ideally between 10% – 20%, but no less than 5%) I recommend contacting me regarding my Bank/Financial Institution recommendations. I always recommend speaking to your own Bank first and seeing what sort of Mortgage details they will offer you, most importantly what interest rate they are willing to achieve you.
I have all of Today's Lowest Mortgage Rates posted on my site here, this does not mean you will qualify for the 'lowest rate' but it will give you a good idea of what the current market interest rate is.
Once you have the given interest rate from your bank I will be happy to introduce you to some of my competitive mortgage brokers and, as a team, we will work to get you the lowest rate you can qualify for, saving you the most money. After selecting the financial source which is best for you it is time to get your official Mortgage Pre-Approval. This process will check your credit rating, outstanding loans, leases etc to gauge how much of a credit risk you are to the financial institution. They will gauge your Debt-Service-Ratio by how much income you make compared to the size of loan that is realistic to offer you. From all of these details they will finally give you a maximum loan amount that they are willing to offer you.
After receiving the maximum loan amount you have been Pre-approved for, gauge the financial responsibility you are comfortable making. This does not mean you should spend the full amount. I feel the best and easiest way to gauge a comfortable amount for you would be to use My Mortgage Calculator to find what your monthly payments will be. Cater your search and purchase price to what you want your monthly expenses to look like, not what the bank has per-approved you for.
Keep in mind, you will additionally be paying monthly for Strata Fees & Property Taxes (a yearly expense broken down monthly) utilities and life in addition to your mortgage payments.