The Canada Mortgage and Housing Corporation (CMHC) recently released the results of an online survey it conducted with 788 Canadians who had purchased their first home – and taken on their first mortgage – within the previous 12 months. Here we recap some of the key findings, and offer some tips for those still in the hunt.
Mortgage Answers Found Online
Given that first-time buyers tend to be younger, it won’t come as any surprise that the vast majority (83 per cent) used online resources when researching their mortgage options. About half (53 per cent) said they visited lender websites, and about one-third used real estate agency sites (36 per cent) or mortgage brokers’ online offerings (31 per cent).
Thumbs Down For Social Media Sources
Social media wasn’t a particularly popular venue for researching mortgages, with only 37 per cent saying they used it as tool. But, of those that did, more than half (56 per cent) used Facebook.
Perhaps surprisingly, only one quarter of respondents (26 per cent) did their research on a mobile device, with about 20 per cent saying they downloaded an app.
The Power of Knowledge
Armed with their online and mobile research, a little more than half (53%) said they were able to negotiate a better interest rate than they were originally offered. Still, only 37 per cent of first-time buyers “totally agreed” that they “had a good understanding of the mortgage options available, compared to 57 per cent of “repeat buyers” (those on their second or subsequent home purchases) who felt that way.
Still in the market for your first house? Here are some tips to help you make sure you’re ready to close the deal.
- Losing out when multiple offers are submitted on a home can be frustrating, but don’t get caught up in the excitement and bid more than a house is worth. If you go too high, you may not be able to get a mortgage to cover the cost.
Also read: How a Bidding War Can Cost You Your Mortgage>
- Make sure you understand the pros and cons of fixed rate versus variable rate mortgages.Also read: Fixed vs. Variable Mortgages>
- Revenue Canada allows you to withdraw up to $25,000 from your RRSPs (or $50,000 for a couple) to use towards the down payment of your first home under the Home Buyers’ Plan, but you have to pay the money back. Here are the details.
- Credit unions also offer mortgages. Here are some details about the products they offer.
- If, like many young Canadians, you’re looking at a condo purchase for your first home, enquire about condo fees and restrictions that will impact you.Also read: Condo Rules – What You Need to Know>
- Your broker or financial institution will ask if you want to sign up for “mortgage insurance.” Say, no, and buy your own third-party policy. Here’s why.