A mortgage is a loan that the borrower uses to purchase, or maintain a home or other real estate and agrees to pay the funds back in a series of regular payments over a period of time. The property serves as collateral to secure the loan.

If you follow my writing journey here, then you know we were having some issues with a neighbor and had started to look into home ownership. I wanted to make sure I shared that journey here too! The home ownership world is filled with BIG words, and a lot of activity! There is A LOT to learn, that’s for sure! So, in today’s post, I want to touch a bit on mortgages. How much do you know about what a mortgage is? Do you know how to qualify for one? If you do, that’s super awesome! Keep reading, because maybe I’ll surprise you and through something new in! And if you don’t, then get some paper and a pen and get ready to take notes. JK sorta.

Don’t underestimate the power of saving small amounts of money.

I, as a mama to 3, know that sometimes there isn’t hundreds of dollars left over to save for a “rainy day”. In fact, I can’t remember a time in my adult life so far when there was that much! But, those small dollars, they really do add up. If you can save even $5.00 from your paycheck, it really will add up. Some banks also offer cashback, rewards, and many other types of programs in order to maximize every dollar. I definitely wish I would have saved earlier on in my life, and I wish I would have understood how important it is to do it. Maybe those are just life lessons though.

Start saving small amounts of money, and even if buying a house isn’t in your near future, saving money for your future is always a good idea.

Please don’t think that your spare change is meaningless. Save it. Watch it grow. This will help you with coming up with the down payment for your home. A down payment is the initial payment of the property. It is recommended to have 20% of the price of the property available as a down payment. So, if you were to purchase a home for $300,000 then your down payment would be $60,000, following the 20% recommendation. Growing a savings account that big definitely doesn’t happen over night. Save the small amounts of money and watch it grow. It really will add up, don’t worry!

If you’re REALLY serious about building up money for your down payment, you could consider things like, limiting the number of coffees you buy in a week, as well as, driving less often. You could learn how to coupon, and also shop things that are on sale. Buying in season fruits and vegetables is a good way to save on produce too. Do a major de-clutter of your house and post things on Kijiji to make a few dollars. You could also get a side hustle, to grow your income. (Examples – grow a blog, become an influencer, offer online services, baby-sitting, dog walking, etc.)

Be aware of your credit score and financial health.

As a young adult I was very oblivious to this and now I’m here begging you to not be! Make sure you know about your credit score, and if it needs improving then make sure you are on a path towards doing that. Your credit score is a 3 digit number that shows how well you manage money, and also how risky it would be for a lender to approve you. It’s an important number to know about. Learn about your accounts, and the services that come with them, and get really comfortable with your finances. This can be a tough subject for some, and as someone with anxiety, it is TOUGH for me too! But, there is power in knowledge. Educate yourself about your situation and clearly understand what needs to happen so you can move forward.

Know what you can COMFORTABLY afford.

Remember that life sometimes likes to throw things in your path and you have to be ready for it. Maybe it’s an unexpected bill, or a major car repair. (Using a calculator like THIS can be very beneficial.) Ensure that when you’re taking on another expense, that it is an amount that you are able to afford with ease. Using a calculator can be super helpful. I recommend this one – Mortgage Affordability Calculator. Remember that, while you maybe can easily afford the mortgage payment, you need to also be able to afford things like food, car insurance, home repairs, etc. It’s important to not overextend yourself.

Personally, I want us to have enough funds saved that even after we pay the down payment, we still have at least a small amount of money left.

House repairs is one of the things that really freaks me out when I imagine home ownership. What if I wake up one day, and go to make my cup of coffee, and the roof fell in, and now I have no roof in my kitchen?! I know that this is a very real part about it. I’m starting to feel more comfortable with all the unknowns that could happen, simply by being aware of where our funds are going, and ensuring that we are saving.

Get yourself pre-approved.

“If you are pre-approved, it means that a lender has stated that you qualify for a mortgage loan based on the information you have provided, and subject to certain conditions. A mortgage pre-approval often specifies a term, interest rate and principal amount.” TD Bank This ensures you are looking at real estate in the right price category too. You don’t want to fall in love with a house that is way out of what you are approved for and then be crushed. Get yourself pre-approved before looking. (This is my opinion.)

Explore all first time home buyers programs in your area.

I am based in Canada but a quick google search can tell you if there are programs that you may qualify for. You could qualify and not even be aware! Here are a few resources that might be beneficial to check out!

Canada First Time Home Buyers Incentive is a great resource.

FHA – List Of First Time Home Buying Programs In The United States

UK Guide

Covid-19 has definitely taught me the importance of saving, and being financially secure. My husband was out of work for nearly 2 months, and as a single income family, this really affected us. Living through this, and experiencing such uncertainty has taught me so much. I really recommend starting a savings account if you haven’t already, and find out different savings programs and cashback programs in your area. Now that we’ve learned a bit about mortgages, we are going to be exploring getting ourselves pre-approved!

Are you on a first-time home buyer journey? If you are a home-owner, what kind of advice would you give to someone on this journey?

Love Always, Enn


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