5 Simple Mortgage Strategies for First-Time Buyers

Buying your first home in Surrey is exciting but can feel overwhelming. Prices are high, demand is strong, and getting a mortgage can be tricky. To succeed, you need a clear plan. Here are five simple mortgage strategies to help you buy your first home in Surrey.

1. Know the Challenges of Surrey’s Housing Market

Surrey is one of the fastest-growing areas in British Columbia. First-time buyers often face these hurdles:

High home prices: Surrey’s growth has pushed prices up, making affordability tough.

Competition: Many homes get multiple offers, which can drive up prices.

Strict lending rules: Mortgage stress tests and other requirements can make approval harder.

Understanding these challenges helps you prepare better.

2. Get Pre-Approved for a Mortgage Early

A mortgage pre-approval can make home buying easier. Here’s why:

Sets your budget: You’ll know how much you can afford.

Makes you a stronger buyer: Sellers prefer pre-approved buyers.

Locks in an interest rate: Protects you if rates go up.

To get pre-approved, lenders check your income, credit score, and debt. Having your financial documents ready speeds up the process.

3. Find Ways to Boost Your Down Payment

Saving for a down payment can be tough, but there are ways to make it easier:

First-Time Home Buyer Incentive: A government program that lowers mortgage payments.

RRSP Home Buyers’ Plan: Take out up to $35,000 from your RRSP tax-free.

Gifted funds: Some lenders allow family members to help with your down payment.

Using these options can help you buy sooner.

4. Choose the Right Mortgage: Fixed vs. Variable

Understanding mortgage types helps you make the best choice.

Fixed-Rate Mortgage

Keeps monthly payments the same.

Ideal if you want stability and predictable costs.

Usually has a slightly higher interest rate.

Variable-Rate Mortgage

Interest rate changes with the market.

Can save money if rates go down.

Best for buyers comfortable with some risk.

Your choice depends on your budget and risk tolerance.

5. Work With a Mortgage Broker to Find the Best Deal

Buying a home is complex, but a mortgage broker can help:

Access to more lenders: Brokers work with banks, credit unions, and private lenders.

Personalized options: They match mortgages to your needs.

Less stress: They handle paperwork and negotiations.

Why Work with Asim Ali?

Asim Ali is an experienced mortgage broker who helps first-time buyers in Surrey. He knows the market and can find you the best mortgage options.

6. Check Your Credit Score Before Applying

Your credit score affects your mortgage approval and interest rate. To improve it:

Pay bills on time.

Keep credit card balances low.

Check your credit report for errors.

A higher score can help you qualify for better loan terms.

7. Budget for Extra Homeownership Costs

Owning a home comes with more than just a mortgage. Be prepared for:

Property taxes: Based on location and home value.

Home insurance: Required by lenders.

Maintenance costs: Repairs and upkeep add up.

Strata fees (for condos/townhomes): Covers shared services and maintenance.

Planning for these costs prevents financial surprises.

8. Understand Mortgage Penalties and Terms

Many first-time buyers overlook mortgage penalties and terms, which can lead to unexpected costs.

Prepayment penalties: Some mortgages charge fees if you pay off your loan early.

Portability: If you move, some lenders allow you to transfer your mortgage to a new property.

Renewal options: Understand your options when your mortgage term ends.

Knowing these details helps you avoid costly surprises.

9. Consider Government Grants and Tax Credits

There are several programs that can help first-time buyers save money:

First-Time Home Buyers’ Tax Credit: A non-refundable tax credit to help with closing costs.

GST/HST New Housing Rebate: Helps recover some of the taxes paid on a new or substantially renovated home.

BC Property Transfer Tax Exemption: Available for first-time buyers on homes under a certain price limit.

Taking advantage of these programs can reduce the financial burden of buying a home.

Mistakes to Avoid When Applying for a Mortgage

Even small mistakes can hurt your chances of approval. Avoid these errors:

Big purchases before closing: New debt can lower your approval chances.

Skipping pre-approval: Puts you at a disadvantage in a bidding war.

Forgetting about closing costs: Budget for legal fees, inspections, and taxes.

Job changes: Lenders prefer steady employment history.