First-time home buyers rely mostly on family members and agents

Buying your first home is an exciting time but it also comes with many questions, concerns and, in some cases, nerves.

According to the new Canada Mortgage and Housing Corporation (CMHC) 2015 First-Time Home Buyers Survey, when looking for a home, first-time buyers primarily seek financial and lending advice from family members at 76 per cent, a REALTOR® at 72 per cent and a mortgage lender at 70 per cent.

The survey release coincided with the fifth anniversary of Financial Literacy Month in November.

“For many Canadians, buying their first home is the single, largest purchase they have ever made.” said Nathalie Fredette, the vice-president of client relationship management for CMHC.

“Our aim is to provide mortgage brokers, lenders and other industry professionals with valuable information and useful tools so that they can better guide their clients through this major life event.”

“CMHC’s survey results reiterate the central role that mortgage professionals play in providing first-time home buyers with the information they need to manage their money and debt wisely,” said Jane Rooney, Canada’s Financial Literacy Leader.

“The more we understand the financial literacy needs of Canadians, the better we can be at providing the right information at the right time to help them build their financial knowledge, skills and confidence.”

First-time home buyers are two times more likely to use social media to research home buying information than other mortgage consumers, according to the survey.

The survey also found that first-time buyers are not as confident as repeat buyers. They tended to have a lower understanding of mortgage options and were more likely to find the mortgage process difficult. They were also less certain about where to go if they faced financial trouble.

Over 70 per cent of first-time home buyers received advice regarding mortgage rates, terms, affordability and repayment strategies from their brokers and lenders. Advice on long-term mortgage strategies increased a first-time home buyer’s level of understanding of options and their level of satisfaction with their mortgage professional by over 80 per cent.

CMHC offers a number of free tools and resources, including online calculators and a Home Buyer Step-by-Step guide, to help potential home buyers evaluate their financial readiness so that they can make an informed home buying decision.

This month, the Manitoba Real Estate Association (MREA) also announced a new financial literacy publication, to help make the home buying process easier for Manitoba newcomers and first-time buyers.

To help meet the need for plain-language financial literacy tools, Realtors teamed up with Literacy Partners of Manitoba and Manitoba Immigrant and Refugee Settlement Sector Association to develop the free illustrated guide to the home-buying process that was released in time for Financial Literacy Month.

Buying a Home in Manitoba  complements existing resources such as the Home Buyers’ Road Map, developed by the Canadian Real Estate Association in collaboration with the Financial Consumer Agency of Canada.

“This is a great resource for buyers, especially first-time buyers. It’s something newcomers, young people, and almost anyone will be able to understand, and that’s the goal. This resource will make the process of becoming a homeowner easier for people from all walks of life,” said Roberta Weiss, the president of the MREA.

The booklet covers budgeting before you buy, applying for a mortgage, working with Realtors, and writing an offer to purchase. It also includes a “words to know” glossary section.

The booklet is available in banks, schools, community centres, libraries, and through Manitoba Realtors.   MREA is also providing the booklet on its website and free copies are available for pick-up on request.

The project was funded by MREA, Assiniboine Credit Union, and New Journey Housing.

The CMHC survey found that over seven-in-10 first-time buyers received advice from brokers and lenders about fixed-rate mortgages versus variable-rate mortgages, as well as mortgage terms and conditions, the purpose of mortgage loan insurance and how much mortgage they can afford.