First-Time Home Buyer's Complete Guide in Ontario: How to Buy a Home with as Little as 5% Down

Buying your first home is an exciting milestone, but many aspiring homeowners in Ontario believe they need a large down payment, perfect credit, or a high income to qualify for a mortgage, but there are more options available than most people realize.

Whether you're purchasing your first home in Mississauga, Brampton, Toronto, or anywhere in the GTA, understanding your mortgage options can help you achieve homeownership sooner than you think.

How Much Down Payment Do You Need?

One of the biggest misconceptions among first-time home buyers is that you need a 20% down payment to purchase a home.

In Canada, you may be able to buy a home with as little as:

• 5% down on the first $500,000 of the purchase price
• 10% down on the portion between $500,000 and $1.5 million
• 20% down for homes priced at $1.5 million or more

For example, if you're purchasing a home for $600,000, the minimum down payment would be $35,000.

What If You Have Bad Credit?

A low credit score doesn't mean you can't get a mortgage.

While major banks often have strict lending guidelines, we work with alternative lenders who consider factors beyond just your credit score.

You may still have options if:

• Your credit score is not great
• You have collections on your credit report
• You've gone through a consumer proposal
• You have limited credit history

At Brevity Capital, we understand that every situation is different, and our alternative lending solutions can help you purchase a home, while rebuilding your credit.

What If Your Income Isn't High Enough?

Many potential buyers assume they won't qualify because they don't earn six figures.

However, mortgage qualification depends on several factors, including:

• Household income
• Existing debts
• Down payment amount
• Credit history
• Property taxes and housing costs
• Employment stability

If you have concerns about qualifying, we can look at your financial situation and find the best solution for you to buy a home.

Self-Employed? No problem!

Self-employed individuals often face challenges when applying for a mortgage through traditional banks.

If you're self-employed as a business owner, contractor, freelancer, or commission-based employee, you can still qualify for a mortgage with the right lender.

When self-employed, you need to apply with certain lenders who consider factors beyond standard employment income, and that's where we can help.

Beyond the Banks: Exploring More Mortgage Options

As a mortgage broker, we work with all types of lenders including:

• Major banks
• Credit unions
• Alternative lenders
• Private lenders

This broader range of lenders can be especially beneficial for buyers who have:

• Credit challenges
• Unique income situations
• Self-employment income
• High debt ratios
• Recently changed jobs

Having access to multiple lenders increases the likelihood of finding a mortgage solution that fits your situation.

First-Time Home Buyer Programs

There are several programs designed to help first-time buyers enter the market and potentially save thousands of dollars.

Depending on your circumstances, you may be eligible for:

• First Home Savings Account (FHSA)
• Home Buyers' Plan (HBP)
• Land Transfer Tax Rebates
• Various provincial and federal programs

Common Mistakes First-Time Buyers Make

Before starting your home search, avoid these common mistakes:

Taking on New Debt

Avoid financing vehicles, opening new credit cards, or making large purchases before your mortgage closes.

Changing Jobs

A significant employment change during the mortgage process may affect your approval.

Not Budgeting Enough

Aside from your down payment, remember to budget for closing costs, legal fees, adjustments, and moving expenses. Broker fees can apply in certain situations.

Assuming You'll Be Declined

Many buyers disqualify themselves before speaking with a mortgage professional. You may have more options available than you think.

How We Help First-Time Home Buyers

Purchasing your first home can feel overwhelming, but having the right guidance can make the process much easier.

We help first-time buyers by:

• Reviewing your financial situation
• Determining how much you may qualify for
• Exploring options beyond the major banks
• Finding solutions for credit challenges
• Assisting self-employed borrowers
• Explaining down payment requirements
• Guiding you through the mortgage process from start to finish

The Bottom Line

If you've been told you need a huge down payment, perfect credit, or a very high income to buy a home, it may be time to get a second opinion.

Whether you're working with a 5% down payment, rebuilding your credit, self-employed, or unsure if your income is sufficient, contact us at Brevity Capital. We are here to help you achieve your homeownership goals.

Get in touch for a free consultation and build a plan that helps make your goals into a reality.

Mississauga Office: (905) 814-4455
Email: [email protected]