Are you ready to buy a house?

Credit Score

Buying a home or condo is one of the most important decisions a person will make in their life. This decision will influence your future for the next 25 years at least. Taking this into consideration, today’s Canadians must weigh the arguments and decide whether they prefer to buy a house or whether they prefer to continue renting.

First Deposit

To buy a house, it’s not enough to simply go to the bank and ask for money. You will need to save money before applying for a mortgage. You will have to make a first down payment of 20% of the total price of the house because the banks grant mortgages only for a value of 80% of the price of the house. If you have less than 20% for your down payment, the bank will ask you to buy mortgage insurance, which will increase the price of your mortgage by 4.75%.

Mortgage Closing Costs

 Mortgage Closing Costs

Closing costs include the legal and administrative fees to officially transfer the property on your behalf. These fees include land transfer tax and all other fees charged by the notary, insurance, etc. Make sure you have an insurance agent involved in this process from the beginning because some homes are not insurable.


The finalization of the mortgage requires a signed copy of the sales contract, the verification of the deposit, the names and information of all lawyers, builders, insurers and real estate agents involved in this transaction, as well as a legal description if it’s possible.

Credit score

Before you offer a loan, the banks will analyze your credit score. However, they do not look only at the number associated with it, but also the history of your payments, the types of credits you have, etc. If, for example, you only have credit cards for small loans (less than $ 1,000), you may not qualify for a mortgage, even if you make all your payments. If you want to get a mortgage, you want to have an impeccable history for the last two years and have at least $ 1,500 credits and more.


In order to convince the bank of your creditworthiness, you will have to demonstrate that you have held a job for the last two years. Pay stubs, a letter from the employer and your tax returns will be required to obtain the bank’s approval.

Autonomous employee

Individuals who are self-employed will require income statements for the last two years. This history must be approved by a certified accountant. Self-employed people are, in the eyes of the banks, somewhat riskier investments and, therefore, it may be more difficult for them to obtain loans.

Solidary Mortgage

Two people can sign a common mortgage to offset the price of buying a house, thus becoming solidary debtors. In this case, both people will need to be approved for the mortgage, with their combined income and credit history being the deciding factor. However, if one of the people becomes insolvent, the bank may ask you to make the payment in the place of the other party.

Are you ready?

Buying a home is an important decision that includes a lot of details to consider. Unless you are able to save enough money to buy the house directly, be sure to evaluate the advantages and disadvantages of the mortgage.