Step-by-Step Guide for First-Time Home Buyers in British Columbia

by Riz Dhawan

Step 1: Start Saving for a Down Payment 💰

In BC, you’ll need a minimum down payment based on the purchase price of your home:

5% of the first $500,000
10% of any amount over $500,000
For homes priced at $1.5 million or more, a 20% down payment is required (as they don’t qualify for CMHC-insured mortgages).

🔑 Pro Tip: Aim for at least 20% to avoid paying mortgage default insurance, but if that’s not feasible, the minimum down payment is perfectly acceptable.

How to Save:

Open a Tax-Free First Home Savings Account (FHSA) to save tax-free.
Budget monthly to set aside money for your down payment and closing costs.
Look into First-Time Home Buyer Incentives like BC’s First-Time Home Buyer Program and the Federal First-Time Home Buyer Incentive to reduce upfront costs.

Step 2: Check Your Credit Score 🏦

A strong credit score is key to getting the best mortgage rates. In Canada, your score can range from 300 to 900. Ideally, aim for 680 or higher to qualify for most lenders.

Improve Your Credit:

Pay off debts and make payments on time.
Limit new credit card applications.
Monitor your credit score regularly using free tools like Borrowell or Credit Karma.

Step 3: Know Your Budget 💸

Determine Affordability:
BC’s real estate market is competitive, especially in cities like Vancouver and Surrey. A realistic budget helps you focus on homes within your reach.

Consider Costs Beyond the Purchase Price:

Property Transfer Tax (PTT): First-time buyers may qualify for a full or partial exemption if the home is priced up to $500,000.
Closing Costs: Budget 1.5–4% of the purchase price for legal fees, inspection fees, and more.
Strata Fees: If buying a condo or townhome, account for monthly strata fees.

Use Tools:
Try online mortgage calculators to estimate monthly payments and determine what fits your income and lifestyle.

Step 4: Get Pre-Approved for a Mortgage ✅

In BC’s fast-moving market, being pre-approved is essential. It shows sellers you’re serious and gives you a clear understanding of your borrowing power.

Steps to Get Pre-Approved:

Choose a Lender or Mortgage Broker: Shop around for the best rates and terms.
Gather Documents: This includes proof of income, employment, savings, and any debts.
Understand Your Options: Fixed vs. variable rates, mortgage terms, and amortization periods.

🔑 Pro Tip: A mortgage broker can help you find competitive rates and explain federal rules like the stress test, which ensures you can afford payments even if rates rise.

Step 5: Partner with a Pro (That’s Me!) 🤝

The BC housing market has unique challenges, from multiple-offer situations to understanding zoning laws and strata regulations. Having a trusted realtor ensures you’re well-prepared.

Here’s How I Can Help:

Market Insights: I’ll provide local knowledge about neighbourhoods, schools, and amenities in areas like Ocean Park, South Surrey, and beyond.
Negotiation Expertise: I’ll help you secure the best price and terms for your dream home.
Connections: Need a mortgage broker, inspector, or lawyer? I can connect you with trusted professionals.

Bonus Tips for First-Time Home Buyers in BC

Explore Grants and Rebates:
- BC’s First-Time Home Buyer Program: Reduces or eliminates PTT for eligible buyers.
- GST/HST New Housing Rebate: Available for new construction homes.
Consider Pre-Sale Opportunities:
Pre-sales allow you to buy a property that’s under construction, giving you time to save more before completion.
Plan for Rising Costs:
Property values and interest rates in BC can change. Factor in flexibility in your budget for future expenses.

💡 First-time buying can feel overwhelming, but you’re not alone! With careful planning and the right guidance, your first home is within reach. Ready to start? Reach out today, and let’s make your dream home a reality! 🌟