5 First-Time Home Buyers Myths that are super common in Canada

Hey there, future homeowners! If you're diving into the world of buying your first home, chances are you've encountered a few "facts" that may not be so accurate. At Ethical Mortgage, I've got your back and want to help you separate fact from fiction so you can make savvy decisions when it comes to purchasing your dream home. Let me highlight and then debunk some of the most common first time home buyer myths

Debunking Myths and Empowering Home Buyers

1. Down Payment Myths: Ah, the infamous 20% down payment myth. Let me set the record straight—when it comes to buying a home in Canada, you can kick-start your homeownership journey with as little as 5% down for homes up to $500,000 and 10% for homes between $500,000 and $1.5 million. Knowing this can open up a world of possibilities for first-time buyers. For example - the minimum downpayment for a 700k home will be 25k + 10% of 700k-500k = 45k.

   

   
   

2. Don't buy a Car before you buy a home: I'm sure you've heard from well-meaning friends and maybe even a few realtors that buying a car before purchasing a home is a big no-no. While there's some truth in this statement, there's more to it than a blanket no. While it's essential to understand mortgage eligibility, don't let the idea of getting a car hold you back from your home purchase plans. For example, if you're qualified for a home purchase of 750k on your income with a minimum downpayment of 50k, you simply need to ensure your car payments (and other debts) are under 5% of your pre-tax income.

   
   

3. Credit Score Perfect: If you've been striving for that elusive "perfect" credit score, thinking it's the golden ticket to homeownership. Well, the fact is, while a good credit score is important, you don't need a flawless 800+ to qualify for a mortgage. Lenders understand that most new immigrants will not have that 800+ score, infact anything over 680 FICO score is top notch. With some practical financial habits and responsible budgeting, you can secure a mortgage without a perfect credit history.

   
   

4. Renting vs. Buying: The age-old debate—renting vs. buying. Many believe renting is always cheaper, I myself am in that camp more often than not but when you buy a home, you're not just paying a mortgage; you're investing in an asset that can appreciate over time. Consider the long-term value and the chance to truly make a space your own before dismissing homeownership as too pricey. A bit of math coupled with the comfort of stability that a home brings, and the possibility of you living mortgage free and rent free when you retire can be a powerful reason to consider a home purchase.

   
   

5. Income and Home Affordability: "I need a high income to afford a home, right?" Not necessarily! Affordability is about more than just your income; it's about your overall financial picture. By managing your finances wisely, saving strategically, and seeking expert guidance, you might be surprised at what you can comfortably afford without a sky-high income.

Make Informed Decisions with Ethical Mortgage

At Ethical Mortgage, I'm all about simplifying the mortgage process and empowering you to make informed decisions. With a focus on tailored mortgage solutions, financial guidance, and building lasting wealth ethically, I'm committed to your homeownership journey.

Remember, buying your first home should be an exciting and rewarding experience. Armed with the right you can confidently navigate the process.

For more personalized mortgage solutions and expert guidance, get in touch to kick off your homeownership journey—the ethical way. Here's a link to book a complementary consultation.