Mortgage Motivation: Are You Prepared


First Time Homebuyers Mortgage Motivation

Are you ready to buy a new home? Before deciding to obtain a mortgage in Calgary, first look at what is motivating you. If you feel like you should buy a home only because everyone around you is, that’s probably not a good reason to tie yourself into a home loan.

By definition, purchase motivation is described as the psychological reasons behind making certain purchases. One of those purchases is the decision to buy a new home. While owning your home can be exciting, this big-ticket item can also be scary.

Homeownership will impact your life and financial picture for a long time. That’s why talking with a mortgage broker in Calgary is always a good idea.

house new mortgage

Start By Doing Research

Many people looking to buy a home spend a lot of time researching every detail first. Like any other life decision, you want to gather information, specifically about mortgages. Speak with your peers, family members, professional banking services, and mortgage brokers.

Speaking with friends or others who have recently purchased a house will give you a good insight into your potential purchase. They will be able to provide you with a rough idea of property taxes for their home, utility costs, and more.

Watch Out For Buyer Mentality

While searching for a home, you will spend a reasonable amount of time online, gathering mortgage loan information and looking at potential homes. It can be easy to fall into a buyer mentality with targeted ads shown to you on mortgages, real estate agents, and possible home listings.

Other Factors To Consider When Buying A Home


Many buyers watch interest rates and monitor the availability of homes before they make a purchase. Still, there are other considerations people use to justify taking out a mortgage too.

Emotional factors can influence what you want or need when looking at potential home purchases.

Sellers and realtors will target these emotional flags when they are selling homes. So it is crucial to take stock of your needs and wants in addition to assessing your financial matters before you sign mortgage documents.

You Are Here

The best place to start when looking at emotional factors is to describe your current stage of life.
These won’t be the same for all people, but a generalization sets the stage to think about what changes you want.


It can also define your future needs and wants for your first home. For example,

  • Are you a single person who just landed that full-time job and are looking to own not rent?
  • Maybe you just got married, have two incomes, and now you can afford a joint mortgage loan.
  • It could be you just had a baby and need more room for a nursery.
  • Or do you have a growing family and are running out of living space in your current accommodations?
  • You might have a multi-generational household and need a larger lodging with more than one living area under the same roof.
  • For older singles and couples, you may be downsizing or looking for accommodation that will allow caregivers to help you when you need care later in life.

As you can see, there are many reasons why you might be looking at buying a new home.

mortgage signing application

Demographics For First Time Homebuyers

  • 80% Are Employed Full Time
  • 49% Are Single
  • 45% Are Between The Ages Of 25-34
  • 40% Are Married
  • 61% Purchase A Single Detached Dwelling & Have An Income Between $60,000 & $90,000
  • 21% Are New To Canada

Some Canadian demographics indicate percentages for first-time buyers.
They are:

Motivations For Purchasing A Home

When looking at your mortgage motivations for homeownership, consider which of these emotional factors apply to you and how they shape your wants and needs.

  • A Desire To Become Independent
  • Looking For Stability
  • Increasing Your Comfort Leve
  • Finding Something More Convenient
  • Providing A Safe Living Space
  • Expanding Your Socialization Potential
  • Meet Changes In Medical Conditions
  • Wanting Financial Growth
  • Desiring Prestige
  • Gaining Fulfillment Through Ownership

Proceed With Caution

When you are aware of these goals, you can analyze them and apply that data to the reality of the purchase you are considering.

There is a caution here that it is important. Don’t sign up for a mortgage based wholly on emotional factors that override the realities of your financial means.


For example, you may crave prestige and look for a home in a high-end area, only to realize you don’t currently have the money to meet the asking price of the house. An assessment like this can help you find ways to improve your financial means so that you can purchase a similar home at a later date.

There is a good article by Matthew Kassel in the Wall Street Journal that highlights some of the pitfalls first-time buyers should avoid when considering their wants and needs list.

Evaluating Your Current State

Another lifestyle evaluation used by realtors and sellers is matching demographics with psychological factors by creating a category of types for home buyers.

It is called the VALS Framework. It breaks down factors identifying buyers as innovators, thinkers, believers, achievers, strivers, experiencers, makers, and survivors. Just for fun, take a look at this website and see what describes you best.

If searching for your home overwhelms you, there are professionals out there that will help you match your wants and needs to your available resources. A good realtor, bank, or independent mortgage broker can take your collected data, which include emotional factors, and match mortgage plans to your desired goal.


Our professional mortgage brokers at The Mortgage Group in Calgary would be happy to help you analyze the data you have collected and answer any questions you may have about mortgages. Give us a call, 403-571-8142, or fill out our secure contact request form today.

Taking Part In The First Time Home Buyer Incentive

Buying a home

What is the First Time Home Buyer Incentive?

For homebuyers looking to break into the Calgary housing market, the stress test and other changes have made it a challenge. That is in part why the federal government put the First Time Home Buyers Incentive in place. Participants of the program, which kicked off on September 2, will see the funds released as early as November to get them into a home.
The government has invested $1.2 billion into the Incentive, which they hope will run for three years. However, it will close once all of the funds have been allocated.

How Does The Incentive Work?

The loan sharing program contributes 5 to 10% of the home purchase price to qualified applicants. The contribution will lower the overall net price of the mortgage, resulting in lower monthly payments for the buyer. The plan administrators think this will lower payments by $100-$300 a month. The savings makes owning a home much more affordable and means that buyers can qualify for a higher amount.
The Incentive covers three property types: new construction, existing homes, and new or resale mobile homes. With new construction, the government will contribute 5 to 10%. For existing homes and mobile/manufactured homes, the government will contribute 5%. Buyers are not allowed to purchase the house to rent it out. It must be their primary residence.

First Time Home Buyer Incentive qualifications include:

  • You have not purchased a house previously
  • You must have the minimum down payment
  • The purchase must be in Canada
  • It must be your primary residence and not a vacation home
  • In the last four year’s you did not reside in a house owned by you, your spouse or common-law partner
  • You are a Canadian citizen, a legal permanent or non-permanent resident authorized to work in Canada
  • Your household income cannot be over $120,000

Additionally, people who are separating from their spouse or common-law partner would also qualify, even if they do not meet the other incentive requirements.

First Time Home Buyer Incentive
Starting on Sept. 2, 2019 Canadians can now buy a home with government help under the First Time Home Buyer Incentive

How Can I Apply?

Applying is relatively easy. There is an online application that can be filled out. However, the first practical step is to assemble a real estate team. You’ll need to apply for a mortgage pre-approval to see what you qualify for. Then, with the help of a real estate agent, it’s time to shop for a home. Once you find a home you’re ready to make an offer on, then it is recommended you fill in the application forms. As mentioned above, you will still need to come up with a minimum of 5% for the down payment.

At The Mortgage Group, we can assist you with the pre-approval process and filling out the paperwork. Our mortgage brokers in Calgary will help you submit the firms to the government administrator. They will then contact us – or whomever you have help submit the forms – when you are accepted. From here, your real estate lawyer will likely become involved as everything is arranged to close the agreement with the government. They will submit all of the documents, and ensure that the government’s contributions are paid to the mortgage upon confirmation of title transfer and possession date.

Is The First Time Home Buyer Incentive Right For Me?

The money the government is giving is not a grant or free; it is a home equity loan. It is a second mortgage on your property, though it has no regular principal payments, nor is it interest bearing.

The loan over a 25-year duration and you can repay it at any time. If homeowners don’t pay it off before 25 years, or they sell the home, the government takes a cut of 5 to 10% of the fair market value price of the home. The percentage is based on how much they put in initially. If it was 5%, then they will only expect 5% in return. The Incentive cannot be ported onto a new property. If you decide to port the mortgage and move into a new home, you will have to pay off the Incentive.

Any increases to the value of your home are shared with the government at final payout or sale. If housing values go down, the government also takes a loss in the final sale. There can be joint mortgagees, but all parties are then responsible for the loan. There are also ways to refinance the loan without triggering a need to repay the government’s money early.

While the cap may not be enough to put you in your forever home, this can be a great way to get into a starter family home. The Incentive is not ideal for everyone. If you have any questions and want to learn more, give us a call. We would be happy to look through the options with you and help you find the perfect mortgage product.