What to Do First as a First-Time Home Buyer (and What to Budget For)

Buying your first home can feel like a blur of advice, opinions, and conflicting information. The key to reducing stress isn’t knowing everything — it’s knowing what to focus on first.

If you’re planning to buy within the next 3–12 months, here’s a practical breakdown of what matters most and how to prepare financially.

Step 1: Get Financing Clarity Early

Before looking at listings, you need clarity on your numbers.

Broker vs. Bank: What’s the Difference?

Both banks and mortgage brokers follow a similar approval process: you share your financial details, someone runs the math, and you learn what you qualify for.

The difference is options.

• A bank offers only its own mortgage products.

• A mortgage broker compares multiple lenders and structures to find the best fit.

Early in the process, your goal isn’t choosing a rate. It’s understanding your realistic price range and identifying any gaps to fix.

The 5 Things Lenders Care About

Most mortgage approvals come down to five core factors:

• Stable income

• Consistent savings habits

• Strong credit history

• Buying within lender-approved ratios

• Marketability of the property

Improving even one of these areas can strengthen your approval and expand your options.

What Income Documents You’ll Likely Need

Documentation depends on how you earn income:

Salary / Full-Time

• Recent pay stubs

• Employment letter

• T4

Part-Time / Variable Income

• Employment letter + pay stubs

• Often a 2-year income average is used

Self-Employed

• T1 Generals + Notices of Assessment

• Business financials

• Typically 2 years of history

Being prepared with documentation speeds up approval and reduces stress during an offer.

Down Payment: Clearing Up the 20% Myth

You do not always need 20% down.

General guidelines in Canada:

• 5% minimum for purchases up to $500,000

• 10% on the portion above $500,000 (up to $1.5M)

• 20% for $1.5M+ properties or rental properties

Lenders will verify where your down payment comes from, so keep funds traceable and well-documented.

Credit Score: What to Focus On

A strong credit profile is built on consistency.

Focus on:

• Paying bills on time

• Keeping credit utilization low

• Maintaining healthy credit history

Improving your score even slightly can unlock better mortgage pricing.

Budget Beyond the Down Payment

A smart rule of thumb is to plan for approximately 2% of the purchase price in additional costs.

These can include:

• Home inspection

• Appraisal (if required)

• Legal fees

• Moving expenses

• Transfer taxes and closing costs

Your true affordability depends on your all-in monthly and upfront costs, not just the mortgage payment.

The Buying Process in Simple Phases

The home buying journey typically follows five stages:

1. Preparation

2. Offer and confirmation

3. Legal steps

4. Safety and financing conditions

5. Final steps before possession

Getting pre-approved early, even if you’re months away from purchasing. Thisnhelps identify what needs adjustment before you start house hunting seriously.

The Most Common First-Time Buyer Stress

It’s rarely just the mortgage payment.

Most first-time buyers underestimate:

• Strata fees (for condos or townhomes)

• Insurance

• Property taxes

• Utilities

• Closing costs paid out-of-pocket

Planning your total monthly cost prevents surprises after you move in.

Your Next Step: Get Clarity on Your Numbers

If you’re buying this year, start with:

• A realistic purchase price target

• A clear down payment plan

• Your comfortable all-in monthly budget

• A document checklist based on your income type

The earlier you map this out, the more confident and competitive you’ll be when the right property appears.

Book a First-Time Buyer Consult and we’ll build a simple plan tailored to your numbers and timeline.