It can be a good idea to talk specifically to first time home buyer lenders when you’re buying your first home. By this we mean lenders who specialize in providing mortgages to first time home buyers, as these guys will be best suited to getting you the greatest deals. You see, not all banks and financial institutions will work with first time home buyers, especially since the credit crunch; mortgage lenders are more wary now and their conditions for lending large sums of money are more stringent. Being a first time home buyer can put you at a disadvantage, so who should you talk to?
Using Your Own Bank
If you've been banking with the same bank for decades, and you’re happy with the service they provide, you’ll be tempted to go and talk to them first. After all, your local bank will know you and your spending habits better than anyone else, so why wouldn't they give you a mortgage? Well, unfortunately it’s not always that straight forward. You may put in an application via your local branch, but generally this application will then go to a central mortgage processing office and be handled by people who don’t know you. They will look only at the figures on the application form and make a decision from there, which won’t always be the one you want to hear. You may then be forced to go and talk to another of the first time home buyer lenders; providing all your personal information all over again.
Using a Mortgage Broker
This is when using a mortgage broker can be a great idea. Rather than submitting numerous applications to different banks you submit just one application with a mortgage broker and they then do all the hard work for you.
A mortgage broker will know specifically which lenders to approach on your behalf. He will know which ones have the best deals on interest rates and buyer incentives, and he’ll know which lenders are most likely to make a positive decision based on your circumstances.
Mortgage brokers can also sometimes negotiate a better deal than you would be able to get when talking directly to the bank, and the great thing is, you don’t have to pay them a fee for their services. Their fee is covered by the mortgage lender.
Where Can You Get First Time Home Buyer Mortgages?
If you’re someone who prefers to look into all the different mortgage products and lenders yourself, no problem. Some home buyers do prefer to do all the leg work themselves to be sure of getting the most appropriate financing, so if you’re doing this you’ll want to know which banks are first time home buyer lenders.
Well, the majority of Canadian banks will offer some sort of first time home buyer financing, but the two largest first time home buyer lenders are BMO and RBC. Both banks have a number of different options so you can tailor a mortgage to your individual needs. Gone are the days when you simply borrowed an amount and paid it back again – there are now many different types of mortgage products and you should speak to a mortgage specialist at one of these first time home buyer lenders to find out which one is right for you.
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