This post was written by the former Estonian Credit Union, now Northern Birch Credit Union.
In January my fiancé and I bought our first house.
We began the process during the winter of 2017. Our first step was choosing a lender and having a pre-approval meeting, and of course we chose ECU. You can search the home buying process for days online, but nothing beats meeting face-to-face with a professional. The process is slightly different for everyone and it really helps having someone to talk to and get answers from.
For example, at this meeting, as first time home buyers we learned about –
- the home buying process in general,
- the Home Buyers’ Plan (HBP) and how we could use it,
- that we needed to build some more credit (a few weeks later we got a credit card),
- how much we needed to have saved as a down payment,
- and that we needed to have been at our work places for a certain amount of time in order to qualify for a mortgage.
We learned a lot, and having this meeting gave us solid goals to work towards.
Fast forward to winter 2018. We had built up good credit. We had a down payment ready and had had our eye on the real-estate market for a while. We would spend Sunday’s driving around the areas we could afford to buy in and had a good idea of what we were looking for.
We were ready to book another pre-approval meeting. This time everything went seamlessly. We found out:
- exactly how much we could afford (ie. what we were pre-approved for)
- what the mortgage rates were
- what to look out for with realtors and sellers
- and to not make an offer without conditions
We were now armed with the information we needed in order to start actively searching for our home.
We visited about 5 houses, met three realtors and emailed and spoke on the phone with a few others. Since we never signed a contract with a realtor, we used a different one in each city we looked in. Our list of wants and needs changed as we went. The areas we were looking in changed as well. We had to decide whether to have less of a daily commute to work and get less house in the Brampton/Milton/Halton area, or get more house for our money and have a longer drive from the Burlington/Hamilton/Stoney Creek area.
We visited an end-unit town house in Stoney Creek that we fell in love with. It was newly renovated, closer to family and suited our lifestyle perfectly. By the time we decided this was the one, we were actually about an hour too late to put in a bid. Someone had bid on the house and their offer was accepted conditionally. We were heart broken. However, to our pleasant surprise a week later our realtor called to say their financing hadn’t worked out! They must’ve had a change in circumstances or not have done a pre-approval to see what they could afford. Lucky for us, we had.
After some frustrating back and forth between our realtor and the seller’s realtor, our offer was accepted (below asking!) upon our conditions of a home inspection and financing (very important). We had 7 days to organize the inspection, financing and a lawyer. We brought the MLS listing number to Liisa, the Manager of Retail Lending at ECU, and set up another appointment to finalize the mortgage and decide on an open or fixed rate. We went with a referral from a family member for our lawyer (who is also a family friend and fellow Estonian). We asked family and friends who they used for their home inspections but ended up finding a company on our own with great reviews online.
The next three weeks were crazy! At the time we were renting a condo in Toronto month-to-month and the house we were buying in Stoney Creek didn’t have anyone living in it. Our closing date and move in date were only weeks away!
While dealing with closing on the house we were also frantically calling around to cancel all of our utilities in our condo and setting up utilities in our new home, updating our address with banks, Service Ontario, CRA etcetera. We also had to set up home insurance (which we bundled with the car we had to buy for the new commute) for the day the house became ours. All of these small but important things piled up quickly!
Although much of the dealings were between the lender and lawyer themselves it was so important to have open and timely communication between the lawyer, lender, their assistants, my fiancé and I. There were dozens of emails and calls which were hard to keep up with as we both work full time. Thankfully we felt really comfortable with whom we had chosen and everyone was so helpful, answered all of our questions and made us feel taken care of.
If there is any wisdom to pass on from our experience it would be
- Interview or meet with a few lenders, lawyers, and realtors. Everyone works differently. Make sure you take time to pick the right people to suit your personal needs and communication style. We really valued being able to be frank and speak openly with the people we chose to work with and have them be frank and open with us in return. Communication was key!
- Be flexible and open. Our “needs and wants” list changed constantly. Once you start seeing what’s out there you need to be able to stay open minded. Initially we were sure we wanted an older, detached character house. After dozens of emails with lists of houses that followed our list of wants and needs one day our realtor sent what she called a “mixed bag” of listings that strayed from our list. In it was an end unit town house with white floors and more windows than any house we had seen yet. We would have never considered it on our own, yet it’s the house we ended up buying!
- Don’t put an offer in without conditions! Insist on a house inspection and having financing in place. If the seller doesn’t accept these terms, its likely not a house you’d want to buy.
- Closing costs really add up. Especially once you hit the $500,000.00 mark. We planned for ballpark ranges from the internet and what our lender suggested. It ended up being a bit more than we thought. There were also fees associated with setting up and cancelling our utilities as well as miscellaneous items we needed to buy right away (garbage and recycling bins, snow shovels, salt, hose, rake etcetera).
Written by Tuuli Hess
To learn more about the financing options at ECU, click here.