Buying Your First Home? Get Pre-Approved First!

Buying your first home is an exciting milestone in your life, but it can also be a daunting process, especially when it comes to navigating the complex world of mortgages. There are so many factors to consider, making it stressful to know where to start. Fortunately, you don’t have to face the process alone. We’re here to guide you and help you make informed decisions.

By taking a few key steps and understanding some important considerations, you can become a successful home buyer. One of the most important preliminary steps before entering the market is getting pre-approved for your mortgage.

What is a Mortgage Pre-approval?

A pre-approval is the cornerstone of any successful purchase strategy and one of the most important considerations for any aspiring homeowner. It’s a conditional commitment from a lender that they will provide you with a mortgage up to a certain amount. This pre-approval is based on your financial information, including your employment and income, credit score, and debt load.

Being pre-approved does not mean that your mortgage application has been approved; it just means that if all goes according to plan, it should be approved once all paperwork has been assessed and submitted. Additionally, your lender cannot give you a final mortgage commitment unless they assess the property you are buying to make sure it meets their guidelines.

Why is Mortgage Pre-approval Important?

Getting a mortgage pre-approval is essential for first-time homebuyers because it provides you with a realistic idea of how much home you can afford. With a pre-approval, you can set a realistic budget for your home search and avoid the disappointment of falling in love with a home you can’t afford. You’ll also learn what your monthly payment will be and get a rate guarantee for up to 120 days.

Getting a  pre-approved may give you increased leverage during negotiations and help ensure that your offer is taken seriously by sellers. The seller will want to know that you have the financing in place to complete the sale and may be more likely to negotiate. However, this does not guarantee that your offer will be accepted or that you won’t have to compete with other potential buyers.

Other Important Considerations for First-Time Buyers

While mortgage pre-approval is a crucial factor in the home-buying process, there are other important considerations you should keep in mind –

  1. Your downpayment: One of the most significant home expenses is the downpayment. The minimum down payment in Canada is 5% of the purchase price for homes up to $500,000. For homes between $500,000 and $1 million, the minimum down payment is 5% on the first $500,000 and 10% on the remainder. Homes $1 million or more require a minimum down payment of 20% of the purchase price.
  2. Downpayment assistance – Making your dream of owning a home more achievable may begin with support from loved ones. A parent or grandparent could provide a monetary gift towards your downpayment. They will need to provide a signed ‘gift letter’ that the funds are a true gift, with no need for repayment.

    The Federal Home Buyers’ Plan (HBP) can give you a significant downpayment boost. It allows first-time buyers to withdraw up to $35,000 ($70,000 for couples) tax-exempt from their RRSPs, if the funds have resided in the retirement plan for 90 days. The funds need to be repaid over 15 years or the money becomes taxable.

  3. Help with qualifying – An option for boosting your chances of getting a mortgage approval is to get a consignor, which typically is a family member. This involves adding their credit history and income to your application to strengthen your position. As a result, the co-signer is equally responsible for the mortgage and will be listed on the home’s title.
  4. Home inspection: It’s highly recommended to have a professional home inspection done before purchasing a home to identify any potential issues. Home inspections typically cost between $500-$1,000.
  5. Closing costs: There are several fees associated with finalizing the sale of a home, such as legal fees, appraisal fees, title insurance, and land transfer taxes. Closing costs can add up to 2-4% of the purchase price of the home. Be sure to have this extra amount set aside, along with your moving expenses.
  6. Recurring monthly expenses: Also remember to budget for your monthly homeownership expenses like taxes, utilities, maintenance and repair costs, and insurance premiums, all of which must be factored into the cost of ownership.

From obtaining a pre-approval through understanding closing costs —there are plenty of steps you must go through before settling into their perfect place—but by taking care of business early on—you’ll end up better prepared than most when confronting competition from other buyers who may not have done their homework!

The bottom line is that buying your first home doesn’t have to feel overwhelming! Doing research beforehand and understanding all aspects involved with purchasing property will help ensure that the process goes smoothly and without any major hiccups along the way. When you know what goes into becoming an educated and successful first-time homebuyer — you’ll have no problem finding that perfect place at the right price!

For first-time buyers in Mississauga, Toronto, and the GTA, remember that you are not alone, we will be your guide along the way and with you every step of the way. Joe Purewal and Team specialize in helping first-time buyers. They have access to lower rates and will get you quotes from multiple lenders, and they’ll advise on downpayment strategies and the documentation you will need to gather. Joe Purewal is ready to start answering your questions and get your preapproval started!


Q: Can I still get preapproved for a mortgage if I have a low credit score?

A: Getting preapproved with a low credit score may be more challenging, but it’s possible. Lenders will consider other factors such as your income and debt-to-income ratio when making their decision. We can give you advice on how to improve your credit score.

Q: What is mortgage default insurance?

A: Making a downpayment of less than 20% comes with an added cost: default mortgage insurance. This insurance is mandatory and designed to protect the lender in case of financial loss. The premium is typically rolled into your mortgage amount, increasing your monthly payment. If you put down 5%, the premium will be 4%, 10% down will require 3.1% premium, and 15% down requires a 2.8% premium. However, if you can make a downpayment of 20% or more, you can skip default mortgage insurance altogether.

Q: Can I change my mortgage type after I’ve been preapproved?

A: Yes, you can change your mortgage type after preapproval, but it’s essential to understand that this may impact the terms of your mortgage, including the interest rate and monthly payment.

Q: Should I work with a real estate agent?

A: Yes, you should. A real estate agent can provide you with access to listings, offer advice on the home-buying process, negotiate on your behalf, and provide guidance on neighbourhoods and market trends. They can also help you navigate legal and financial considerations.

Q: What is a financing condition? 

A: A financing condition should be part of your offer to purchase. It ensures that if you don’t get a final mortgage commitment, you can get out of the deal. It gives you the necessary time and space to secure your mortgage approval, ensuring you have the funds you need to successfully purchase your home. So, before you sign on the dotted line, make sure you add this crucial precaution to your offer.

Q: What are some tips for negotiating when buying a home? 

A: Some tips for negotiating include doing research on the property and neighbourhood, being flexible on the closing date, being prepared to walk away if the negotiations are not going in your favour, and working with an experienced real estate agent who can help you negotiate effectively.

Q: What are some common mistakes to avoid? 

A: Common mistakes include not getting pre-approved for a mortgage, not doing enough research on the property and neighbourhood, not budgeting for all the associated costs, and not having a home inspection done before purchasing.

Q: How can I make my offer more competitive when buying a home? 

A: Some ways to make your offer more competitive include offering a higher price, being flexible on the closing date, offering a larger deposit, and having a pre-approval letter from a mortgage broker or lender.

Recent Blog Posts

Canada is inviting many immigrants every year from India, Pakistan, Bangladesh, China, Philippines and from all over the world. If you are new to Canada and are looking to purchase your own home, it can be challenging. You would have to do your research well and find the experts , like myself who have served 100s of clients in my career. My objective is  to help you find your dream home with affordable options. However, there are several things to consider before making a choice to purchase a property in Canada.

  1. Find a Real Estate Agent to Help Check Your Affordability

Find the Right Real Estate Agent is important. They'll help you assess your affordability and apply the basic rule to every kind of shopping. When making a move to purchase a house, you must first evaluate your financial standing and how much you can afford. You will have to consider renovation costs, on top of the purchase price and the costs for making minor amendments to the house facilities. You should contact a mortgage broker to understand how it works and what your current affordability is. After considerations and consultations with the experts, set your ceiling purchase price, accordingly.

  1. Decide what you are looking for in a house:

First, you should decide the size of your home; the number of bed and baths, kitchen, dining and living space etc. Consider your special needs as well such as hobby and storage spaces, workspace, swimming pools and others. Decide if you would like to move into a city or a suburb, how far you are willing to commute for work, schools you would like your children to be registered with and if you would want to move close to specific cultural community centers. You may also want to seek the help of a real estate agent to help you make better choices in terms of suitability of location, house size requirements and price negotiation. (Multiple Listing Service) is a nifty site to check out to see the current housing market situation.

  1. Decide the type of home:

You can opt for a condominium, townhouse, semi-detached, single/detached or a duplex/triplex house. A condominium (condo) is a less expensive option and very attractive to first time buyers. A point worth noting is that there are monthly condo fees due to condo corporations, which is utilized for the maintenance of the building as and when required. Townhouses are a series of homes, whereas semi-detached houses have a separate land. Both have separate entrances, but are attached wall-to-wall with other houses. Single detached homes can be expensive because they stands separate and free, so you own the house and the land. You are also responsible solely for all costs involved. A duplex/triplex is a single home with multiple units. You own the property and can also rent out the additional units.

  1. Make a Purchase offer

Once you have found the house according to your budget and your lifestyle, it is time to put your Offer to Purchase. This can be done with the help of a real estate agent, or you may also do so with the help of a lawyer or a notary. The document generally includes the purchase price offered, amount of the deposit, chattels (that includes refrigerator, stove, washer and dryer that you are additionally purchasing from the seller) and the closing date for possession of the house, (which is usually 30 to 60 days from the day the purchase offer is made), request for survey of the land and property, the date when the offer becomes null and void, mortgage financing and home inspection conditions that go with the offer.

  1. Financing the home:

You typically seek the help of a financial institution such as banks and credit unions to help you pay the purchase price via a loan. The loan termed as a mortgage can be repaid by you through regular payments over a period of time, typically around 25 to 30 years, termed as amortization period. Your regular payments will be topped up with additional interest rates that you need to pay on top of the principal amount. However, to avail the loan, you need to have good credit history. Therefore, finding the right mortgage broker is crucial for you to be able to get pre-approved. A pre-approval does not bind you. It still leaves you open to pursue other arrangements.

  1. Find a mortgage broker:

They secure you the best mortgage terms and conditions. The amount of your mortgage is calculated based on the price of the home subtracting the initial down payment. If the down payment is less than 20% of the value of your new home, your lender (i.e. the bank) will require Mortgage Loan Insurance. For availing the mortgage, you must have credit and stable (valid) source of income. You must open a bank account and use it regularly. Pay your bills on time, including insurance payments. Apply for small loans to prove you pay on time and apply for a credit card as well. If you stay with the same employer for an extended time period, it is also a very good history that will add up to availing mortgage easily. Also, remember that the minimum down payment for purchase of a property in Canada is 5% of the actual home price for purchases up to 500,000.00 CAD. In case of less than 20% down payment, your bank requires you to purchase mortgage default insurance through either CMHC, SAGEN, or Canada Guaranty (CG).

For more information call Ricky Bola, who have been offering expert solutions for years now and have been Rated the Top 15 Individual Real Estate Agents with Re/Max West Realty - 2023.


Moving is a lot of work and it’s expensive when you factor in all the costs – legal fees, moving costs, real estate commission, decorating, furnishings, and so much more. Sometimes it just makes more sense to love your home instead of listing it.

If you’re thinking renovation, you’ll want to carefully look at how to finance that transformation. There are generally two financing routes – home equity and unsecured credit.

Our hot housing market has greatly increased home values, and with mortgage rates hovering around historic lows, homeowners with enough equity are seizing the opportunity to tap into that equity to create the perfect home that fits their lifestyle and to further boost long-term value.

You can access your home equity through a mortgage refinance, home equity line of credit, a second mortgage or a program called refinance plus improvements. For smaller projects, many look to unsecured credit like a personal loan, line of credit, or credit cards. Here are the benefits and considerations of each:

If the home of your dreams is one renovation away, let’s discuss which option is best for your situation. I’m here to help you maximize your bottom line and personal home enjoyment.


History has proven that homeownership is a solid long-term investment. You build your equity stake through your regular mortgage payments and your home’s price appreciation over time. But wealth building doesn’t have to stop there. Here are 6 ways to do more throughout your mortgage years.

  1. Speed up your mortgage pay down. Change from monthly payments to weekly or biweekly, which increases your number of payments and takes years off your mortgage. Also consider putting found money like raises and tax refunds against your mortgage principal. Check your mortgage contract for the amount you can prepay each year.
  2. Get a financial reset when needed. Too much high interest debt over long periods of time is a definite wealth killer. It chokes your cash flow and having multiple debt payments can be stressful. If you have enough equity, you may be able to move that debt to your lower-rate mortgage, giving you one comfortable payment and thousands in interest savings.
  3. Renovate using your lowest cost funds. With historically low mortgage rates, homeowners with enough equity are using the opportunity to roll the cost of their renovation into their mortgage for one easy monthly payment, and then using their prepayment privileges to pay it off faster. It’s a win win when you increase the comfort and enjoyment of your home, while also improving the long-term value.
    1. Apply for incentives to help pay for energy saving investments in your home.
  4. Look at your mortgage renewal as an important moment of opportunity. When your lender sends out a letter suggesting you renew your mortgage at their current offer, get in touch. Everything pertaining to your mortgage can be renegotiated, giving you the opportunity to get the best possible deal for your current situation, which may be very different from when you first got your mortgage.
  5. Know your prepayment penalty. When choosing between fixed-rate mortgages, be sure to compare how the early payout penalty will be calculated. If you ever need to get out of your mortgage early, having the right mortgage could save you thousands. If you take a lower rate mortgage with a high prepayment penalty, the benefit of that lower rate could mean nothing if you overpay on the penalty to get out of your mortgage.

I’m here to save you money and help you build wealth throughout your mortgage years. Get in touch at any time!