In November, I became a first time home owner and co-purchased a bigger home with my Mom. My family had been looking for a long time, but we could never agree on the right house until now. Fortunately, we found a newer home in a great community.
However, the process of buying my first home was super stressful and complicated. Since it had been so long since my parents had bought a home (we lived in ours for 15+ years), they forgot most of the details and I wound up having to figure out most of the details by myself 😮💨
All of this happened while I was transitioning into a new job and figuring out the details of moving to the U.S. as a Canadian expat. So let’s just say that the past couple months have been hectic!
In this 3-Part series, I am sharing what my first time home buying experience was like and some of the hard lessons that I learned along the way. Make sure to read Part 1 – Due Diligence. This Part 2 will focus on Financials, and Part 3 will focus on the Offer. Please continue enjoying this semi-rant 😬
#5 – Get pre-approved ✅
Based on years of frustration, our family honestly didn’t expect to find a home that we could all agree on. Hence, we didn’t bother getting a mortgage pre-approval (even if it did last 90 days). However, as our luck had it, we did find a great home! Without a mortgage pre-approval, we felt super pressed for time because everything had to move so quickly.
One reason I wish we had gotten pre-approved was because interest rates slightly went up in the week that we made our offer on the home. I spent hour searching the web and meeting with mortgage brokers to find the best rate. I was also trying to figure out whether to go with a 25 or 30 year amortization because those also came with different rates.
Ultimately, I settled for 1.89% which was the best that I could find from a large financial institution 👍🏼
#6 – Keep digital records of your tax slips and bank statements 📄
The struggle didn’t stop at finding the best rate… My mom and I then had to compile a bunch of paperwork for the mortgage specialist, which was a much bigger effort than I thought. It wasn’t too bad on my side because I like to keep a digital copy of my records. However, my mom kept everything on paper, so she was scrambling to find her old tax slips and documents. It was honestly so stressful… so I highly recommend you opt for paperless bank statements and save all of your tax documents in one place.
Tip: Register for My CRA which is where you can access all of your tax records and history in Canada.
#7 – Consolidate your funds in advance 💰
Another struggle was providing the sources of our down payment, which came from both my mom’s and my own accounts. This was complicated because each of us had multiple accounts (e.g. TFSA, RRSP, Mutual Funds, Other Savings, Chequing, etc…)
As a requirement for the mortgage, we had to provide a 90 day history of every one of these accounts. As you can imagine, it was a lot of manual repetition which resulted in a dozen of screenshots 😮💨
To make it easier for yourself in the future, I recommend consolidating all of your funds into 1 account at least 90 days in advance of applying for a mortgage. This way, you only need to show the history for that 1 account and save your time and energy!
Stay tuned for Part 3
The purpose of this mini series is to share some tips and learnings for one of the most important purchasing decisions that you will make in your life. These are all things that I wish I had known in advance so hopefully you learned a thing or two so far! Please stay tuned for more hard lessons about the Offer in Part 3.
Thanks for reading and be sure to like, share, or leave a comment!
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