The Greenhouse
by Pine

The 6 steps to preparing for your first home purchase

Here is an essential checklist of everything you need to get ready to purchase your first home.

It's time to turn that dream into a reality.

We know that with all the excitement it’s difficult to figure out every step in the process, but that’s where we come in. Here is an essential checklist of everything you need to get ready to purchase your first home.

Step 1: Determine how much you can afford

Though probably a given, deciding on your budget is crucial when it comes down to home purchasing. With that comes other decisions such as how much space you’re going to need, and what location you have in mind. 

Generally, owning a home pays off financially when you plan on living in it for at least five years. Think of it as a long term investment. On average, it's often five years because if you get a fixed rate mortgage, you’re generally locked in for that term and it can be expensive to break the contract. 

Step 2: Understand your mortgage options

There are many options when it comes down to deciding on how you would like to get your mortgage. Banks tend to be less expensive in the long run, but they can also have incredibly long waiting periods, it’s harder to get approvals, and has a significantly longer process. A private lender is quick and efficient, straight forward, and caters packages specifically to your needs, but this option may cost you a little extra upfront. 

Step 3: Decide how much money you're using as a down payment

Your down payment typically runs from 5% to 20% of the purchase price. If you’ve been saving up, then ensure you have proof of the funds in an account over a period of time, showing regular deposits. You may be loaned or given the amount as a gift, in which case you’ll ideally want it to show in your bank account history for about three to six months to verify that it is legitimate.

Step 4: Prepare Documentation

When you're close to putting an offer on your home it’s time to get your documentation in order. There are many documents you need in order to verify your finances on the mortgage application. Things like paystubs, T4s, bank statements, proof of freelance/self-employment income, and copies of your last two tax returns. All of these documents help you confirm your income and prove that you will be able to afford your upcoming mortgage.

Step 5: Get a mortgage pre-approval

It’s easy to compare rates with any number of leading mortgage lenders, or find a local mortgage broker who will shop your application to multiple lenders on your behalf. Shopping around ensures that you are getting the best mortgage rate possible according to your financial standings. 

This allows you to begin an estimation on your future mortgage payments, understand the maximum amount of a mortgage you’ll be approved for, and lock in an interest rate for a set period of time depending on your lender. During this process, the lender looks at your credit, as well as some crucial documentation to determine the maximum they’ll allow you to have, as well as your interest rate. 

Step 6: Secure a real estate agent

Unless you’re looking to buy privately, a real estate agent is important in the entire process. Your real estate agent has access to listings, can book showings, and helps you understand neighbourhoods of interest. They’ll also assist with making an offer and coordinating your closing. Find an agent you can trust and who is flexible with your availability.

Ultimately, the home buying process can feel daunting, but with the right steps in place, you'll give yourself a bit more assistance in landing the home of your dreams.

Question? We've got answers.

What’s involved in getting a mortgage from Pine?

Does Pine charge any lender fees?

Can I take advantage of the Home Buyer’s Plan with Pine?

Will I have a point of contact at Pine?

Is my data secure with Pine?

How much of a down payment does Pine require?

Can Pine help me if I have poor credit?