Now is the best time for first time buyers to jump into the market.  The first time buyer's market in Toronto, Mississauga and the GTA is hopping!  Whether you're considering the purchase of a home or condo, properties geared towards first time buyer's are selling quickly and at times in multiple offer situations. 

It is best to have already met with a mortage specialist for pre-approval so you know how much you can spend, as often you will have to act quickly! 

You will require a "good faith" deposit, which is part of your down payment.  There is no set amount, however in the Toronto area you should expect to have at least $10,000.00 in liquid assets as deposits are generally due within 24 hours of an offer being accepted.  Some sellers may request as much as a 5% deposit, however this may sometimes be negotiable.   

First timers are also taking advantage of all the first time buyer programs available to them.  For example: 

• Using up to $20,000.00 in RRSP's for your down payment
• 5% down payment
• Ontario & City of Toronto Land Transfer Tax rebates
• A conventional mortgage is now available with a 20% down payment instead of 25%
• low, low interest rates
• Up to 35 year mortgage amortization periods

• Open a savings account and deposit a fixed amount from each pay- cheque, including any income tax refunds. 
• Sell or refinance your car, if possible. 
• Sell any stocks, bonds or marketable securities. 
• Determine if there is any cash value in a life insurance policy. 
• Sell any personal property, or other assets to generate cash, if possible.
• Obtain a gift or loan from family or friends, if possible. 
• Obtain a line of credit at your local bank which allows discretionary spending of the funds (this should be arranged before applying for financing). 
• If possible, obtain a guarantee from a friend or family member whose credit worthiness would guarantee the financing. 
• Obtain personal loans on unusual assets i.e. jewelry, cameras, coin/stamp collections, etc. 
• Arrange with your current landlord to purchase the property at a pre-agreed price, and invest "sweat equity" to create the down payment. 
• Obtain a loan from your current employer or business, if possible. 
• CMHC provides high ratio financing i.e., up to 95% of the selling price which eliminates the need to gather a large down payment. 
• High ratio lenders or insurers will accomplish the same thing as CMHC, except that they are operated by private corporations, and not by the Canadian Government. 

Information courtesy of Coldwell Banker Terrequity Realty

The biggest part of purchasing your new home is qualifying and being approved for your mortgage.  As a result, your credit history plays a big part in buying your new home.  Good credit translates into lower rates for the borrower.  Here are just a few tips that can help put you in a better position under the discerning eye of an underwriter!

• Do you have past due balances that have been neglected?  If they are showing up on your credit report and you want to purchase a home, make sure you bring them up to current status whenever possible.
• Do you have outstanding debt that you can afford to pay off right now?  Try to get these accounts down to a zero balance, or at least a lower balance.  If your cash on hand doesn't allow you to do this, try to distribute the debt amongst other open credit cards.  You can also consider opening a new line of credit and transferring part of the balance off a card that is close to being "maxed out".  If you can get the resulting balances below 50% of the available credit, you're on the road to improving your credit score considerably in most cases.
• Do not close existing credit card accounts, even if you don't want to deal with the company any more.  Believe it or not, the credit history is a good thing to have!
• See if your credit provider will increase your available lines of credit.  This can, in turn, reduce the overall debt ratio, but only do this if your credit card company can do that without a hard credit inquiry.
• Do you have past dues and charge-offs within the last two years?  Pay them off now, if you can.  Past dues older than two years will have little to no impact on your credit score if they are paid, but can possibly bring the score down, which is something you don't want to do.  Focus on that 2-year time frame.
• Do you see errors in your report?  Request the credit bureau delete any outstanding debt that is incorrectly charged to you, or things that should have been removed that you have already paid.  They have an obligation to reconcile this.  If you see items on your report that are less than two years old and you have the money to pay it off now, mark the back of your payment check with the following notation:  "Accepting this check is evidence that the transaction is complete and this charge will be deleted from my credit record."  If necessary, you can use this canceled cheque as proof of the transaction in the even the outstanding debt is not removed promptly and interferes with the closing of your loan.

As a first time home buyer, you may be able to take advantage of this plan administered by the Canada Customs and Revenue Agency.  You must meet certain criteria in order to participate.   Use this Link  to find all the information you need to know.

Click here  for an excellent step-by-step guide from The Canada Mortgage and Housing Corporation.  It includes information on how to determine your requirements, down payment, understanding your local housing market, affordability and cost calculations, choosing a real estate team and mortgage highlights.  It also provides details on preparing an offer and the steps involved in closing your sale.

This calculation arbitrarily assumes that 10 percent of your mythical mortgage payment would cover home owner’s insurance and principal repayment, with the rest going for interest and property taxes. It also assumes your top tax bracket (known to accountants as your marginal tax rate) is 28 percent. If your tax bracket is higher, your tax savings will be correspondingly higher. 

A. Your present rate                                         $ ______________________________
B. Multiply by 1.32                                               x 1.32
C. Equivalent monthly Mortgage payment     $ ______________________________

The result (line C) is a rough estimate of the amount you could spend for monthly mortgage payment (principal, interest, property taxes and homeowner’s insurance) without being out any  more money at the end of the income tax year than you are with your present rental.

Infromation is taken from www.terrequity.ca