7 Smart Questions Every First-Time Homebuyer Should Ask - And My Unfiltered Answers
Last week, I got an email from a first-time buyer that was so good, I had to turn it into a blog post.
She and her husband are looking to buy their first home. Like many of my clients, they’re smart, skeptical, and want to do this right. They asked 7 questions - and every one was spot-on.
So I’m going to answer them here - clearly, honestly, and without the sales fluff.
And then I’ll add a few questions I wish more buyers would ask… because they could save you thousands.
Question #1: “What lenders do you work with?”
We have access to over 50 lenders - banks, credit unions, monolines, and private lenders - and we hold top-tier status with many of them.
That means better rates, better service, and in some cases, faster approvals. Most people only ever hear what one bank has to say. We let the best lender compete for your business.
Question #2: “How are you compensated?”
For most traditional mortgages, the lender pays me directly - not you.
There’s no extra fee, no hidden cost, and no surprise charge for working with a broker.
If there’s ever a product that includes a broker fee (like some niche private lending or second mortgages), you’ll know up front before anything moves forward.
Question #3: “What mortgage products would you recommend for a first-time buyer?”
This depends on you - your job, your goals, your timeline, your budget.
Are you salaried or self-employed? Will your income change over the next few years? Planning to move or stay put? Want to be aggressive with prepayments or keep things flexible?
The right mortgage product isn’t just about the lowest rate.
It’s about protecting your future and avoiding the landmines that cost people tens of thousands down the road.
Question #4: “What’s the best rate you can offer right now - and are there any conditions?”
Rates are always subject to qualification and change - so until we have the documentation it’s a moving target.
However, we don’t sell the “no-frills” trap mortgages some brokers push to get attention.
You know the ones: no prepayment, high penalties, or strings buried in the fine print.
They look cheap - until you try to break it or make a change. Then the real cost shows up. Surprise!
And you regret ever “saving” that extra 0.1-0.2% on your mortgage interest rate.
My job isn’t to win a rate war. It’s to help you win over the life of the mortgage.
Question #5: “What are the prepayment privileges?”
This is one of the most overlooked parts of a mortgage - and where lenders quietly limit your flexibility.
The gold standard is:
Up to 20% of your original mortgage amount as a lump-sum payment each year
And the ability to increase your regular payments by 20% annually
But that’s not always what you get.
Some lenders offer 15%/15% or even 10%/10% options - meaning you can only prepay 10% of the original amount and increase your payments by 10%. Others limit you to doubling payments but don’t allow lump sums at all.
Now here’s the real talk:
If this is a season of life where you're just trying to ride the wave - maybe you're expecting kids, covering daycare, or managing other priorities -hammering down your mortgage might not be the goal right now.
In that case? If there’s a lender with a lower rate and less aggressive prepayment privileges, that might be the better fit.
It all comes down to matching the mortgage to your actual life - not just chasing features you won’t use. And that’s what we’ll do.
Question #6: “What are the penalties if I need to break the mortgage early?”
If you're in a variable rate mortgage: 3 months' interest.
If you're in a fixed rate: it's either 3 months’ interest or the “interest rate differential” (IRD) - whichever is higher.
And heads up: the Big 5 banks are notorious for charging massive penalties on fixed-rate mortgages. That’s why I often recommend shorter terms if we’re going that route (3 years or less).
Fun fact: over 60% of Canadians break their mortgage early. So yes, this matters - a lot.
Question #7: “What documents do you need from me to get started?”
If you're salaried or hourly, the standard documents are:
Job letter
Recent pay stub
2 years of T4s
Government-issued ID
If you’re self-employed, I’ll send a slightly different list. Either way - I’ve got a secure online portal to upload everything quickly and easily.
BONUS: Questions Most People Don’t Ask (But Should)
Here’s where the gold is. These questions are what set smart buyers apart:
➤ “How much mortgage can I actually afford - not just what I’m approved for?”
Banks approve based on ratios. I help you budget based on reality - future kids, daycare, lifestyle changes, interest rate risk, and more.
➤ “What happens if I break my mortgage early?”
As I mentioned, it’s very common. Break penalties can range from a few hundred to tens of thousands. We plan ahead for that - most brokers don’t.
➤ “What’s the catch with cashback or low advertised rates?”
That shiny, too-good-to-be-true rate? Usually for no-frills mortgages like I mentioned - with fine print like you wouldn’t believe, or clauses that stop you from paying out early/refinancing unless you’ve actually sold your house (I know. It’s a real thing.).
Cashback mortgages? If you pay it out early, you need to pay it back, or a large chunk of it back. Surprise!
➤ “Do I need a realtor before getting a mortgage?”
Nope. In fact, getting pre-approved first helps you and your realtor move faster, negotiate better, and shop with confidence. Plus, I’ll give your realtor a heads-up on how you’re qualified - and your realtor will LOVE you for that.
It’s like going shopping without knowing how much money is in your bank account - why do that when you can check with your bank (hello, your mortgage broker!) ahead of time, instead of getting “DECLINED” at the till? Let’s save you the hassle.
➤ “How do I get help from parents or gifted down payments?”
There’s a right way to do it - and a wrong way that can delay your mortgage. I’ll walk you through the paperwork so the lender sees it as legit.
Final Thought
If you’re serious about buying - let’s talk.
Whether you're a first-time buyer, moving up, or renewing… the answers above could easily save you thousands over the next 5 years.
Click below to:
✅ Start a pre-approval
✅ Book a quick discovery call
Let’s make sure your mortgage works for you - not just the bank.
Best,
Jeff Dinsmore
Mortgage Broker
FSRA # 10315
TMG - The Mortgage Group