Thank you to everyone who has read my previous blog post, it feels good to be back! As you can tell, I have been on a high when it comes to my home. I feel like every second of the day revolves around it. Whether it’s paying bills, decorating, cleaning and just living here, all of my thoughts revolve around this home of mine.
This might seem like a boring post to some people, but I have been wanting to write about my experience to my readers. You may already have a home, thinking about buying one or you just aren’t there yet. It doesn’t matter who reads it, I just wanted to share my views as a person who doesn’t work in the industry and kind of give a simple idea to what goes on.
So, if you are interested in finding out a little bit more, keep on reading!
When this whole process started, I was so nervous and stressed out because I didn’t know what to expect. I knew that we had to get approved for a mortgage before any of the fun stuff could happen. My Husband knew so much more than I did, so it made this whole process so much easier. It was definitely a learning curve for me.
Anyways, we had two options that would get us to getting approved for a mortgage. We could either go to a bank and hopefully get approved through them. Or we had the option of going to a mortgage broker where we had a larger chance of getting approved. From my understanding, a broker is able to get a larger range of lenders who are willing to approve us and a wider range of interest rates. The lesser the rate, the better for you, as you won’t have to pay as much interest on your mortgage. There’s no such thing as an interest-free mortgage, unfortunately.
Once we made that decision, we were referred to a broker who was absolutely amazing! There were a lot of ups and downs when it came to getting approved for a mortgage at a low-interest rate. I am not going to get into very personal things, but let’s just say it was a wild ride. Before I go further, let me explain what goes into getting approved for a mortgage.
- Make sure both you and your significant other have been at your jobs for at least 1 year. They will ask you for previous work experience if it has been 1 year or less
- They will ask for your current address and make sure you have lived there for a significant period of time. If you still live at home then you don’t need to worry.
- When it comes to loans and credit cards, make sure there are no late payments and your credit cards are at low balance. This will all show up on your credit report, so tell your broker everything so there are no surprises for them. They will find out one way or another.
- Make sure you have a good credit score. You will not get approved if you or your spouse have a poor credit score. They are plenty of other options that will allow you to still get approved, so if this is you, don’t worry!
- Lastly, make sure you have at least a 5 % down payment. Having a larger one is better for you, as it makes a significant difference when it comes to how much you can afford when looking for a home. There is also a benefit to having a 20% or greater down payment when living in Canada. I won’t get into that, as I still find it a little confusing.
Once you do get approved and the lender agrees to give you a set amount of money to find a home, you begin to have your fun, well sort of. I found the whole “looking for a home” process to be so stressful and annoying. We used a real estate agent to help us look for a home and I quite honestly felt like he was useless. He didn’t do a whole lot when looking for homes, as our families ended up finding more homes to go view whereas our agent didn’t find us anything. The only thing I have to say is that the process went insanely fast, so if we were looking for a longer time than I am sure he would have been more of a help.
When looking for a home, you don’t have to get an agent, you can do it on your own. I did learn that when buying a home through the help of an agent, the buyers don’t have to pay for the commission, the sellers do. There are many exceptions to this rule, as there is with everything, but we were very happy that we didn’t have to pay commision.
Looking for the Home
As I said above, I was so stressed out when looking for a home. We didn’t go to many viewings, maybe 5 or 6 and we looked at a handful of listings online. The frustrating part of it was that we would see a home online and then once we actually viewed it, the house was not at all what we expected it to be. It never is nowadays, as pictures always look good to sell the home. So with the constant searching and coming up short, we were both getting frustrated.
The home we ended up buying happened to be a fluke. The weekend we found it was the weekend that we both gave up looking for the home. My sister sent the listing to me and said that we should take a look at it as it’s beautiful. I took a look at the pictures and it seemed nice, but I didn’t think it was anything special. However, this was the one time where the pictures didn’t do it justice. Once we walked into the home, everyone knew it was the one.
Finalizing The Purchase
Once we found the home, we had to put an offer in to secure the purchase. With the Canadian market, we were really nervous because we knew the house would go fast and offers were going to be made over the asking price. When we went to put our offer in, we were the 4th offer. Naturally, we were nervous and stressed out more than we ever thought we could be. It took a good 2 hours from the time we made the offer to the time we were told that they accepted it. We did have to go over asking price, but we both knew that it was well worth it and it was still within the arrange that we got approved for.
From there, all the paperwork began. We went from finalizing the deal with our real estate agent to finalizing the mortgage with our broker. The process of that is pretty simple. It was just us signing a bunch of papers and figuring out how we wanted to make our payments. We decided to go with a fixed rate meaning that our interest rate will stay the same for the next 5 years meaning we don’t have to worry about our payments increasing for 5 years.
Our payment schedule is accelerated weekly which means that we have a payment every single week. We decided on this as it pays our mortgage down faster, so instead of a 25-year mortgage, we have a 22 year one. It saves a ton of money and if you are able to do this when you get a home, I highly recommend it. Everybody that we dealt with applauded us for choosing that option. After all the payments are figured out, the paperwork gets sent to the lender and then it also gets sent to our lawyer.
When purchasing a home, you need to have a lawyer in order for the home to close. The lawyer does all the background work when dealing with the lender and making sure all of our paperwork that the lender needs is sent over. He also does other legal things that I can’t even remember, so I am not even going to try to get into it. The most important part of the lawyer is to sign all of the mortgage papers, so our home can close and it can officially be ours!
The whole process started at the end of July for us and our closing date was at the end of September. As you can see, the process went so insanely fast. If you are in the market for a home, just know that everything does work out. It may seem overwhelming at certain points of the whole process, but just remember that you will end up with your dream home.
If I could give any advice when purchasing a home I would say to make sure you saved up enough money. Between the costs of the downpayment, lawyer costs, set up fees for utilities, reno’s, decorating, furniture etc., you are putting out a lot of money. The more you have saved, the better it will be for you in the long run. Buying a home isn’t cheap and the less you have to worry about the money aspect of it, the better it will be for you.
Thank you for reading. If you have questions about anything, please leave a comment down below.