Tips and tricks on how to prepare for your first or your tenth mortgage

I travelled with my entire family to Montreal at the end of August to visit amazing friends and family, including my 94 year old mother. We are so fortunate to have her around. She is still in the home that I was raised in. Amazing!

There are some fabulous little-known tricks to apply very early on in the exciting process of purchasing a home. Some are logical and some you may not be aware of, so here they are.

Employment:

Keep your job! If you are contemplating changing your employer, make sure you avoid shopping for a home until after the probation period of your new position. If you were headhunted, negotiate if possible to have a permanent and full-time position right away.

Going into business for yourself:

If you are contemplating going into business for yourself, keep in mind that you will need an average of the first 2 years of your net taxable income to qualify; if it is reducing year over year we need to use the lower more recent amount. This is where planning can save you a lot of heartaches! Putting off the move to your own business until after you have bought your home could be a game-changer.

Down payment:

You need to show 3 months of history for your down payment. This can include any money that has been coming in regularly and growing, up to your purchase date. Try to keep your down payment money in a separate account that does not fluctuate downwards as we need to see the balance being the same over the last 3 months, plus any recent income type deposits. Gifts from immediate family members are acceptable for you down payment or part of your down payment.

Credit:

This is crucial. Make sure you make a payment of at least your minimum each month and on time on credit cards. Keep your credit card balances within 50% to 60% of your allowable limit for any credit card debt. Make sure you have at least one credit card and preferably two that are in your name, and not a card from your partner where they are the principal on the card. This will not accumulate any credit history for you. More than two credit cards start to reduce your credit score.

Save, save, save:

Try and have at least 20% down in order to avoid paying the Canada Mortgage and Housing Corporation (CMHC) insurance. This will cost you (added to your mortgage amount) between 2.8% and 4% or between $2,800 and $4,000 for each $100,000 of your mortgage. If you don’t, worry not–CMHC mortgage insurance is set up to help you own your own home sooner.