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First Time Home Buyers

Buying your first home in Surrey, Vancouver BC is quite an exciting proposition but before you can know whether home ownership is right for you, its important to know what is involved. Alpha Mortgage would like to make your experience of first time home buyer loan in Surrey,Vancouver BC very simple and easy and at the same time educational.

There are essentially two main types of home mortgages in Surrey BC:

A high ratio mortgage and a conventional mortgage.

High ratio mortgages are mortgages that have to be insured by the lenders through one of the three mortgage insurance companies in Canada which include Canada Mortgage Housing Corporation (CMHC), Genworth Financial & Canada Guarantee Company.

Conventional mortgages are mortgages that are not insured by the lenders. Any mortgage with less than a 20% down payment is considered a high ratio mortgage and any mortgage with 20% down payment or more is considered a conventional mortgage.

Since high ratio mortgages are insured, borrowers have to pay an insurance premium which gets added/financed into the mortgage amount. The lower the down payment, the higher the premium. A minimum down payment of 5% is required when purchasing a principal residence and a minimum down payment of 20% is required when purchasing a rental or investment property.

Qualifying for first time home  buyers mortgage:

Some of the key factors lenders look
to qualify you for a first time home mortgage in Surrey, Vancouver BC include your annual income, down payment
and your credit history to qualify for a mortgage. Since every
borrower’s situation may be different, we advise you to contact us so
that we may be able to discuss the options you may have and match you
with a product that best fits your needs and lifestyle. Alpha Mortgage Housing Corp. helps you in pre-approving for first time home buyers loan in Surrey, Vancouver BC.

couples show home keys in their hands

Mortgage Loan type:

The two most popular mortgage options are – Fixed rate or Variable rate.

A Fixed rate mortgage is a mortgage loan that carries a guaranteed fixed interest rate and payments throughout the life of the loan. A Variable rate mortgage loan, also referred to as an Adjustable Rate, is a mortgage where the interest rate is adjusted, generally monthly, based on fluctuations in the prime lending rate.

The fixed rate option provides stability, but has historically cost more in interest than the variable rate option. The fixed rate mortgage is based on changes in the bond market, while the variable rate mortgage fluctuates along with the prime lending rate

Making the decision on whether to choose a fixed rate mortgage or a variable rate mortgage for first time home buyers in Surrey, Vancouver BC depends on your tolerance to changes in your payment amount throughout the term of your mortgage. Once again, we can help you make that decision and provide you with all the pros and cons specific to your situation.

The worst mistake you can make as a new homeowner is to get a mortgage for buying a house in Surrey, Vancouver BC that ends up over-extending you financially. The key is to make sure that you can comfortably afford the mortgage payment and other monthly expenses that come with homeownership.

Closing costs:

Some of the most common closing costs involved in purchasing a home include: