So you are thinking about buying a home but you have a few things you need to get in order before that dream becomes a reality… Don’t be discouraged! Everyone has to start the homebuying process somewhere, and as long as you take the steps required you will achieve your goal.
The first step is to assess your situation honestly:
- Do you have a downpayment?
- Do you know your credit score? Is it in good shape or does it need some work?
- Are you dreaming of a home that you just can’t afford on your income?
- Are you seeking employment?
- Are you in the middle of a separation?
Regardless of how you answered the above questions there is a way to achieve home ownership with a bit of financial maintenance. We’ve made some suggestions below but also feel free to seek further advice by contacting Steve Ryan directly at 306-501-9085.
Figure out what you qualify for and ensure that you have a minimum of 5% of the purchase price available to put down. Also be aware that you are also required to have 1.5% of the purchase price to cover legal fees, land title registration, and incidentals (“closing costs”).
Once you have a downpayment goal, start a savings account, TFSA, or – if you are a first time homebuyer – an RRSP designed specifically for saving for a downpayment and closing costs.
If you have an immediate family member that would like to assist you with your down payment than that portion of the down payment is considered a gift. This is possible you would just want to inform Steve as soon as you meet with him.
It’s very important to know your score. You can contact Steve for that information but you are also entitled to have your credit report sent to you by Equifax Canada once per year.
Be sure to make all of your bill payments on time each month.
You can raise a low score by lowering the amount owing on revolving credit. It affects your credit the closer your balance is to your credit limit.
Sometimes our dreams don’t quite match our current reality. If this is the case, take some time to go house hunting within your price range and make a solid plan for how you can generate a downpayment and get that mortgage. It’s important to manage expectations and be sure not to overstretch your means, which could be trouble down the line.
You need to provide proof of employment to qualify for a mortgage, which might be tricky if you’re in the middle of a career change or have just finished school. The best thing you can do during that transition time to get yourself mortgage-ready is to ensure that you’re making all your payments on time each month and putting away any money you can spare for a downpayment and closing costs. It will make getting approved that much easier once you land that great job.
Separation in Progress
Don’t worry! If you’re in the process of separating, we can still start the process of mortgage pre-approval. We will, however, require your separation agreement in order to assess spousal support and/or child support (whether paying or receiving), as well as assess liabilities and how they will be split between you and your former spouse. The best plan of attack in the interim is to reduce debts as much as possible, ensure all payments are made on time each month, and put away whatever you can to build up funds for a downpayment and closing costs on a new home.