How to Achieve Home Ownership

This is an opinion and tip piece that predates the skyrocketing market changes.
Having said that, this article shares considerations for those that don't know what it takes to buy a home, and is written by someone who had struggled to even see themselves ever becoming a homeowner... but found a way to do so.

    I can count how many passive-aggressive comments I've faced from friends & acquaintances alike who - for whatever reason - have assumed that since my husband and I have finally been able to buy our first house, it must mean that we are swimming in piles of cash... meanwhile, that's far from the truth. They're comments that are reminiscent of things my parents used to say, so I have to constrain myself to not take it personally while also recognizing the pain point [in the other person] in which it's coming from. 

Don't get me wrong - I KNOW the struggle with the ever-climbing costs, and how hard it is to save when you aren't in a position to live rent-free or cheaply. This is why we couldn't even imagine doing it and it took just pulling the trigger while gritting our teeth & hoping for the best to get to where we are now. IT'S NOT EASY, but this advice may help you...

   The reality is that I've struggled greatly with money ever since I was young. So much so that even as we signed the paperwork to buy this house, we were still not mentally prepared for it and were in complete disbelief that it was actually happening! We were barely bringing home 6 figures a year combined, and because we were renting/living in a metropolitan area for many years, saving money has been really hard to do. But we did it, and I want to share the process of how we got here so that YOU can make some decisions to reach your home-buying goal too!

   It may be noteworthy to point out that I'm in southeastern Ontario (in Canada) and so with a banking tip that I'm going to share, you'd have to check that it's actually possible where you live before you do it. I was born in Toronto, and moved to Oakville in Grade 1... and ended up spending the majority of my life there. My husband and I moved around to Burlington and Hamilton, but always stuck to living in that area. But that entire area (the Greater Toronto Area) is not an easy one to live in if you're not from a millionaire family -- we couldn't get a mortgage on anything there because even condos were starting to go for $750,000+. It's a very real situation that's spreading rapidly, with prices still going up, which has meant that many people are feeling even more discouraged about getting into home ownership. Our home buying process was secretly years in the making, and we found a way to make it work...

The look of frustration... this is how it feels just thinking about buying a home.
And we can't deny how much harder it's becoming with sky-rocketing prices,
and high rent that prevents you from saving money. I feel you...

   For starters, the real focus is the initial funds, since that's frankly the hardest part to prepare for. Everyone is aware that you need a downpayment... but unless you've had a face-to-face with someone that will review the list of initial costs, some may take you by surprise. A couple that are friends of ours used a broker during their process - which is an added cost, all to secure the lowest/best rates possible - which was something we skipped entirely. Having had a lifelong report with our bank, we were able to get a pre-approval for a mortgage in minutes, and was able to secure an interest rate that was lower than 3%.

   Start with your own bank since they'd want to work hard to keep your financial matters all in one place, but don't be afraid to look around since pre-approvals aren't binding. When it comes to the mortgage amount that would be available to you, it's based off of the income level(s) and credit score(s) of those involved in the application... which is why it's always good to get a pre-approval, even if you aren't ready to jump on it. Knowing the ballpark amount that you'd be looking at is the best place to start. 

   We actually got our first mortgage pre-approval years back, all to know what price range of a house we'd be looking at when it came time to make the move. This allowed us to determine approximately how much of a downpayment we'd need to have - keeping it mind that you need a minimum of 5%. As an idea: on our house, which was around $300,000 purchase price, we needed $15,000 as our downpayment. We used a trick that a lot of financial advisors preach about - which involves moving money into a RRSP to use for home buying. 

   How that worked was through this process: We took $25,000 from our line of credit, sunk it into a RRSP, and had it continuously cycling through short term investments. Because moving that much money to a RRSP provides a huge tax return (almost $10,000 to be exact), we were able to start paying that down come tax return time. It is a stressful way to do it because you're basically borrowing money to save money, but this was the ONLY way we were able to have that much money put aside. During the 5 years we left that amount invested, that $25K nest turned into a little more than $32K -- and that's more like the amount needed to make the move.

Tired AF, but celebrating this momentous occasion!
Taken on May 8, 2020 - our closing day -
after the 4-hour drive, and waiting in a parking lot to get the go-ahead to retrieve the keys...
It became a weird process because we signed the deal right before the pandemic was declared.

   But I'll be completely honest here... my parents never got into home ownership so this entire process was alien to me! We also didn't have anyone to help us out; with either monetary gifts or advice. Unless you're working through a private sale, the truth is that there are a lot more costs involved, many of which need to be paid before you even get the keys to the place (your closing date). I went into this thinking our nest would be the downpayment, furniture, and some minor renos to the house, but it didn't work that way at all!

   On top of our initial $5,000 downpayment to secure our offer, we had to pay just over $500 for the home inspection, just over $13,500 for the lawyers fees + the remainder of our downpayment, another $600-ish for duct & fireplace cleaning, the initial fees for home insurance & utility set-up, about $8500 to paint & furnish the house, a couple thousand to get the landscaping equipment we'd need, and with the remaining amount - we started plugging away at the minor issues highlighted in the home inspection. By the time our closing day approached, we only had a couple thousand left which had to be used on the moving company.

   It seems like too much only because that all that had to be done during the 3-month period leading up to us moving into it. I think it goes without saying.. but since we also had to pay the rent & bills on our rental home, we needed every cent we could pinch to make sure both houses were taken care of. Because we're unfortunately in a buyers market, one cost had to be done earlier than expected on our offer so that we could "up the game" and beat out another offer that was presented for this house.. 

  The $5000 we had to drop immediately would usually wait until closer to closing, but it was an amendment that forced the other potential buyer to either cough up more - with just 5 days notice - or else their offer would become null and void. This is just something to keep in mind considering how the market is these days... This house had barely been on the market for a couple of weeks, and was honestly being overlooked by many because it's out in the country, yet this was the situation we walked into. Which does lead me to want to touch on the fact that we moved almost 4 hours away from where we used to live.. and that's not a change everyone can make unless they really want to.

Some prefer the city, and some (like me) prefer to have this tranquility in their own backyard.
There were adjustments moving to a rural area, but I wouldn't change a thing even if I had to go back.

   The facts were clear to us earlier because before even looking at this area that we now live in, we had a realtor trying to find us a place in the GTA. Even with having the wiggle room to buy a house that was around the $400,000 mark, we were forced to consider moving an hour northwest all to be able to get into something in that price range. The problem was that the only listings coming our way were complete fixer-upper townhouses. Everyone's preference is difference, but since we spent most of our lives living in apartments, buying an attached house or condo just wasn't going to happen; we craved space where we can't hear our neighbours partying through the walls.

  And the fixer-upper townhouses honestly looked like crack houses - complete with giant holes in the walls, electrical cables sticking out everywhere, and zero appliances to go with it. We knew we weren't willing to completely fix up a house and buy all the essential appliances before we could move into it, so that idea quickly went out the window. But you'd be surprised how often fixer-upper houses go on the market for "cheap", so always consider if this is something you want to spend extra on or if you'll be scrolling right past those listings.

   I think we lucked out, but only because we ended up deciding not to tie ourselves to staying in the Greater Toronto Area. It meant we moved away from friends, but we had to decide if we were willing to stretch ourselves thin buying an expensive home that we weren't even sure we wanted. Through a stroke of synchronicity, we connected with my husband's Grandmother, who lives in the nearby city of Brockville... and it was an answer to our prayers. Since my husband has been working remotely for years, and I was fully focused on my business which I now do remotely, it was suiting for us to take this opportunity to start anew elsewhere.

  We connected with our new realtor here and make the trek for a day of house viewings. Coming out here, away from the crazy busy city energies, was all that was needed to convince me I had found my new home. And as soon as we walked through this house... well, our hearts were stolen! Not even 24 hours after viewing this house, we sat down and filled out the paperwork... and the rest became history as we embarked on this journey of home ownership.

My slice of heaven! I was drawn to the rustic charm of this house,
and I couldn't pass on the open wilderness that surrounds it.
THIS is what one can look forward to if you don't have to limit your search area.

   It's something a lot more people are starting to realize... and I can now preach... but moving away from big city centres means you get a lot more bang for your buck! Remember how I said we'd by lucky to get a condo or fixer-upper attached townhouse for around $400,000 in our old area? Well, for $300,000, we got ourselves a 2250 sq. ft. house with 4 bedrooms and a den, 2 living rooms (one on each floor), 1.5 bathrooms, on a quarter-acre of land, complete with a gas fireplace, outdoor fire pit, and outdoor hot tub. Save for the paint job and the upgrades we knew we wanted to do from the get-go, the house was completely move-in ready and without issues.

  We had to get used to living on well water and with a septic tank, but those were honestly minor adjustments that were made easy by the fact that the previous home owners installed a new drilled well and a top-of-the-line water filtration & softener system... not to mention, that it means you don't pay for water when it comes from your own property. That's a big WIN in my books, but it's something to think about if you want to go the route that we took.

   It's amazing to reflect on the differences in housing, because we were paying $1850/month plus utilities for a 2-bedroom house where we used to live! Not only did that situation prevent us from saving money consistently, but it made it a laughing matter to consider what the mortgage on that kind of house would be. The good news is that all we had to do was take those rather drastic moves to get ourselves into home ownership... because after dealing with the initial costs, we're now actually saving money!

  A mortgage on a house of this price means we're only paying $1325/month for the mortgage (including interest & insurance). That's a few hundred dollars back in our pockets every month just for moving away from the GTA! It may have been a long road of uncertainty and headaches to get here, but I can honestly say that it's worth it to do so. Now, all we have to do is focus on paying down our debts (which is always a concern anyway, right?!), but it's a lot of stress off our backs to know everything is (1) manageable, and (2) that we're in our own home, so that won't change anytime soon.

Ashley Tilson is a Holistic Trauma Recovery Specialist that helps victims of childhood abuse who are struggling with triggers and the inability to feel safely free and happy in their adult lives by breaking free from the past and healing their childhood self so they can begin to live the life they think they can only dream about!
Check out her website for more information.