Mortgages 101: Buying Your First Home

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amortization period, default insurance, mortgage default, mortgage option, paying off your mortgage, variable interest rates

Getting a mortgage for your first home is a big financial commitment. The number of options can be overwhelming. Follow the three steps below to learn more about the mortgage process and how to find the mortgage that best meets your needs.

Step 1: Know what you need and want in a mortgage

• Down payment
  find out how much money you need to put down to be able to get a mortgage.
• Down payment financing option: Home Buyers’ Plan
  see how you could use RRSPs for the down payment.
• Mortgage payments: understanding interest versus principal
  learn how your mortgage payments are applied to the loan.
• Choosing an amortization period
  see how this affects how much interest you pay.
• Choosing a mortgage term and type
  look at your options before making your choice.
• Understanding fixed and variable interest rates
  read about the differences and how the decision will affect your payments.
• Frequency of payments
  see how accelerated payment options can save you thousands of dollars.
• Mortgage default insurance
  get the details and examples of how this works.
• Other insurance options
  learn about other mortgage insurance you may be offered.
• Mortgage option: Cash back
  things to consider before you commit.

Step 2: Shop around and get pre-approved

• Before you start shopping around for a mortgage
  make sure your credit report is in order to avoid problems.
• Understanding the pre-approval process
  find out how the process works and get prepared.
• Qualifying for a mortgage
  understand the formulas used to calculate your borrowing limit.

Step 3: Make the right decision for your needs

• Other costs to consider
  get prepared for the other costs involved in owning a home.
• Your rights and responsibilities
  learn about the information you must receive to help you understand key details of your mortgage.

Related Resources

• Publications
• Tools
• FAQs
• Related Topics

• Paying Off Your Mortgage Faster
• Borrowing on Home Equity
• Understanding Reverse Mortgages
• Renewing and Renegotiating Your Mortgage
• Buying and Maintaining a Home: Planning Your Housing Budget

This blog article is for public awareness only, please use it on your understanding.
Article source for public interest from:
http://www.fcac-acfc.gc.ca/eng/consumers/mortgages/mort101/index-eng.asp

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