First-time buyer guide
How buying your first home on PEI works
Here’s every step, from your first question to your keys, plus what’s worth knowing about buying on the Island.
Step by step
From your first question to your keys
Here’s what happens at each step. I’ll walk you through all of it, and you can ask me anything along the way.
Your questions
Ask me anything.
It’s okay if you don’t know where to start. You’re welcome to bring every question you have, and I’ll explain how it works and what the next step would be, at your pace. If you’d like to read a little first, here’s what I tell people about the first step.
Your application
Start your application.
When you’re ready, let’s start with an application and go from there. You can fill it in online, and if anything on it isn’t clear, I’ll walk you through it.
Your documents
I’ll gather what’s needed.
I’ll tell you exactly what I need and help you pull it together. If something is hard to track down, just let me know, and let’s figure it out together.
Your approval
I send it in for approval.
I review your application, find the lender that fits, and send it in. When I hear back, I’ll go through it with you and explain anything that isn’t clear.
Your lawyer
It goes to your lawyer’s office.
Once you’ve found your home and you’re approved, everything goes to your lawyer. Your lawyer looks after the legal side of buying, like registering the home in your name, and goes over the final papers with you. You should feel comfortable with every page you sign. I’ll explain it as many times as it takes.
Keys in hand
On closing day, the keys are yours.
Closing day is the day the purchase is finished and the home becomes yours. I love seeing people start a new chapter as homeowners, and this is where yours begins.
Already own a home? Buying your next one is a little different, because there’s that home, and any mortgage still on it, to think about too.
Buying your next homeGood to know
What surprises people about buying on PEI
Buying on the Island has its own rules. I don’t want surprises, and neither do you, so here’s what’s worth knowing before you start.
Your down payment
You may not need 20% down.
If it’s a home you’ll live in, you can often buy with less than 20% down. The minimum depends on the price of the home. When you put down less than 20%, your mortgage needs default insurance, which protects the lender. You may also hear it called mortgage insurance. Its cost is usually added to your mortgage, and I’ll explain what that means for you. Your down payment can include savings in a First Home Savings Account (FHSA), or money from your registered retirement savings plan (RRSP) through the Home Buyers’ Plan, each with its own rules. If you have a price in mind, my down payment calculator shows the smallest down payment for it.
Closing costs
Closing costs come on top of your down payment.
Closing costs are the other bills that come with buying a home, like your lawyer’s fees and the fees to register the home in your name. PEI also has a real property transfer tax, a tax you pay when you buy a home. First-time buyers can be exempt from it if they meet the province’s conditions, and your lawyer can tell you whether you qualify. It’s good to set money aside for closing costs as well as your down payment, and I’ll go through them with you. PEI’s Closing Costs Support Program (opens in a new tab) can help eligible first-time buyers with a modest household income cover part of their closing costs. You apply for it directly with the Government of PEI. My closing costs calculator works out PEI’s tax and registration fees, so you can get a rough idea of yours.
Property tax
Your property tax can change after you buy.
The property tax on a listing is what the seller pays today. On PEI, the value your tax is based on is reset when a home sells, so your bill can end up higher than the listing shows. It’s worth planning for from the start, and I’m happy to explain how it works.
The down payment program
PEI has its own down payment program.
The PEI Down Payment Assistance Program is a provincial program that can help eligible first-time buyers with their down payment. It’s a loan, not a grant, and it has limits on household income and on the price of the home. You apply for it directly with Finance PEI. If you’d like to know more about how the program works, I’m happy to explain it. You can also read how the PEI Down Payment Assistance Program works, with the Government of PEI’s own figures.
…took the time to make sure I knew about all the local rebates and programs available to me.
Questions
Questions first-time buyers ask me
What if my credit isn’t great?
Credit is only one part of the picture, and lenders don’t all see it the same way. If you tell me where you’re at, I’ll let you know what your options are.
What if I don’t qualify for enough?
Let’s find out what you qualify for. If it isn’t enough yet, I’ll help you understand what could change that, like paying down a debt or saving a little more, so you have a plan. My affordability calculator can also give you a rough idea of the price you might afford.
Does it cost me anything?
My services are free of charge. The only time there’s a fee is with alternative or private lending, and I’ll always talk that through with you first.
What do “term” and “amortization” mean?
Your amortization is the total time it would take to pay off your whole mortgage. Your term is the length of your current agreement with your lender, which sets your rate and conditions for that stretch. A mortgage is usually paid off over several terms. When a term ends, your mortgage comes up for renewal, and I’ll compare your renewal offer with what else is out there. My mortgage payment calculator can show you how a longer or shorter amortization changes your payment.
Why not just go to my bank?
Your bank can only show you its own products, not what else is available to you. There may be better options out there, and I’ll help you find the one that fits.
Whenever you’re ready.
Start your application, or ask me a question first. Either way, you’ll be working with me from the very first message.
Or call or text me at 902-213-8844.