Buying your first home is scary. No matter your age or stage in life, it’s one of the largest financial commitments you can get into, which is intimidating! One of our members shared their story of when they purchased their first home:
I just moved into my first home a couple years ago and, as someone who recently went through the process, hopefully my experience can help those who are about to take the leap into home ownership for the first time themselves!
It’s important to share my situation before I share my experience. I attended university in my hometown and was able to live rent free and complete my degree with little to no debt. This, coupled with working two jobs for two years after graduation, played a large part in being able to save up for a down payment in a relatively short amount of time. I was also able to continue living at my parents’ home while I looked for my own place. So, besides REALLY wanting some personal space and independence (love you, mom and dad!), I didn’t have a hard deadline for moving out.
I chose to work with a Mortgage Specialist as my 8:30-5:00 work schedule made it a bit difficult to visit a branch during “work hours”. It was also really important to me to find someone I felt comfortable with, who would be 100% on my team and who would answer any and all of my questions. I didn’t know much (or really anything) about the home buying process, and my parents hadn’t gone through it for 30+ years. I wanted to feel comfortable and confident going into meetings on my own. My initial meeting with my Mobile Mortgage Specialist went great! She was patient and walked me through the entire process step by step so that I would know what to expect. One of the first things we did was get pre-approved for a mortgage, which helped me understand what sort of budget I had to work with. I’m going to be honest, it was a lot lower than I thought it was going to be! I’m glad I figured that out before I started browsing realtor.ca for hours, only to find the “PERFECT” apartment that I couldn’t afford.
Once I knew what I could spend, my Mortgage Specialist helped me estimate what my future mortgage payments would be. I then set up automatic transfers of my “mortgage payment” into a savings account which allowed me to create a budget and build savings. It also gave me time to get used to having a lot less “fun” money, and to get into the habit of saying “no” to some things that I would have otherwise done when I was mostly bill-free.
Finding The One
It became clear early on that my options were pretty limited if I had to stay within my $230,000 budget. In the end, I opted to purchase a downtown condo pre-construction. Because I was able to live rent-free at my parents’ while it was built, this ended up being a great choice. Although it was frustrating having to wait to move in, I got a place that was brand new, walking distance to my work, and within my budget, which I wouldn’t have been able to do otherwise. When I purchased my unit I had to put 5% down initially. The construction on my building was delayed, so by the time I actually moved in (2 years later), I had slowly accumulated all of my furniture, appliances, and decor, as well as put more money away to make my down payment larger.
Right before I moved in, we finalized my mortgage. By increasing my down payment 20%, I saved the CMHA fees which certainly helped! Because I was a first time home buyer, I didn’t have to pay property transfer tax, but I was glad that early on in the process my Mobile Mortgage Specialist explained all of the additional closing fees I would have to pay, or else I would have been in for a shock: because my unit was brand new, I had to pay GST; the lawyer was a couple thousand dollars; and home insurance was around $500.
Overall, I’m so glad I made the decision to purchase pre-construction and that I used a Mobile Mortgage Specialist to guide me through the process. Since moving in, my unit has gone up $100,000 in value. Also, because it’s brand new, any updates or fixes have been 100% covered by the developer. I’d like to thank Interior Savings and my Specialist for essentially holding my hand through the entire experience. I felt like they were looking out for my best interests the entire time and I never felt silly for asking a question or getting a term explained. When it comes time for me to renew my mortgage (or move on to a bigger place… quarantine has made me realize how small 500 sq feet is!) I’ll definitely use my Mortgage Specialist again.
If you’re ready to take the plunge into home ownership, check out this handy checklist. It covers everything you’ll need to get started. And because Interior Savings knows that every penny counts when you’re saving up for a down payment, find out about the $1000 cash bonus they’re currently offering.