There is no real discrimination in the Canadian mortgage market towards first timers and if there was by some, there are plenty of other lenders that will be eager to get a shot at the business.
Providing a 1st time home owner loan is an opportunity to establish a long term relationship with an applicant or applicants for not only future mortgage renewals, but also new mortgages as they go through their own personal life cycle of buying and selling homes to fit the changing needs of their lifestyle and/or family.
Many first time home buyer mortgage placements are done through an insured mortgage that allows for higher loan to value ratios. Its not uncommon for young couples and first timers in general to not have a great deal of money in hand to make their initial home purchase. An insured mortgage can allow them to potentially borrow up to 95% of the purchase price of the property with only a 5% deposit required.
In order to qualify for a high ratio, insured mortgage, a first time home buyer is still going to have to qualify the same as anyone else in terms of their credit rating and debt servicing abilities. There are not specific advantages or disadvantages to being a first time buyer in this regard.
If the applicants cannot qualify for a higher ratio insured mortgage, or choose not to pay the insurance premiums associated with mortgage insurance, the borrowers can apply to a conventional mortgage through any bank or institutional lender up to a loan to value of 80%.
Depending on the area of the country you live in, there may be regionally supported government programs for a first time home buyer mortgage, but you would have to research this out on a location by location basis. For the most part, there are no special mortgage programs for first time home owners that would be materially different than the typical mortgage programs on the market that are available to the general public.
But while there is lots of potential choices for a first time home owner mortgage, it can be hard to figure out what mortgage program is the best fit, especially if you’ve never gone through the process before. This is one of the best examples of how experienced Toronto mortgage brokers can add tremendous value to the residential mortgage financing process and should really be considered for all 1st time home buyer loan applications.