In April 2015, the Canada Mortgage and Housing Corporation completed an online survey of 788 first-time home buyers. All respondents had purchased a home for the first time in the previous 12 months. (Note: this survey was national in scope -- so buying and borrowing habits may vary by region.)
The vast majority (83 per cent) of first-time buyers used online resources when looking at mortgage options. About half went to lender websites and a third went to broker sites. More than 80 per cent utilized the online mortgage calculators prevalent on these sites.
By far, the average first-time buyer was more influenced by a family member than any other source. This was followed by a real estate agent, mortgage broker and lender.
Surprisingly, less than half of all first-time buyers surveyed were offered other types of financial products (mortgage life insurance, lines of credit, bank accounts, TFSA, RRSP) when dealing with their mortgage professional.
Nationally, 55 per cent reported arranging a mortgage through a mortgage broker compared to 42 per cent for repeat buyers. In both cases, getting the best deal was the predominant criteria for selection. Mortgage brokers also played a significant role in first-time buyers switching financial institutions.
Most first-time buyers were satisfied with their mortgage professional and the advice they received, however, less than half indicated they strongly agreed they would use the same method or institution for their next transaction. This again indicates the buyer is going for the best deal as a prevailing factor. First-time buyers tend to be less confident than repeat buyers that they received the best deal possible. Of course, they also possess a lower understanding of the mortgage process.
This probably came from a feeling of uncertainty regarding the home-buying process and such post-buying costs as insurance, utilities, adjustments, repairs and various unforeseen costs.
In summary, the first-time buyer is going to need a little more hand-holding and guidance than the repeat buyer. They will also need a more follow-up and advice after the transaction is complete. However, I would disagree with the CMHC survey on one finding as it relates to the Manitoba market. Here we deal with people rather than numbers as opposed to some other Canadian centres and I would like to think that extra effort up front means a lifelong client in the end.
Mike Moore is president of the
Manitoba Home Builders' Association
