Preparation is the key to success (and maybe your new home)

Those of you who were Scouts, both boys and girls, learned many valuable lessons about the power of preparation. Hopefully that has helped you as you have grown to be adults.

Today we’re going to talk about preparing to buy a new home and some of the things you need to plan in advance to put yourself in the best possible position.

The most important number in you preparation is 90. That is have the money in place at least 90 days before you anticipate needing it.

There are several reasons for this. First, in order to prove the money is yours lenders will want to see at least a 90 day history in the accounts you will use for your down payment and closing costs. One important note is that when you have an accepted offer you will need to provide the down payment the next business day...so have it in an account you can access immediately, not an investment account, for example, where it might take several business days to access it.

Secondly, if you are in a position to borrow up to $35,000 per person from your RSP (i.e. a first time home buyer under federal rules) you need to have the money in your RSP at least 90 days before you withdraw it.

Finally if you qualify for the First Home Savings Account the 90 day rule does not seem to apply, but you should consult a qualified financial advisor to ensure you are within the rules.

So that’s a short one today but it’s important. You need to be able to document all your financial transactions related to your mortgage and home purchase.

One last thing…help your Real Estate Agent by getting a pre-approval before you start looking for a home. It’s not a 100% guarantee but it will guide you along the way.

I’m Steve Willson, a Mortgage Agent Level 1 with Mortgage Alliance in Toronto. These thoughts are my own and each person’s situation is different. For a no obligation conversation you can contact me through stevewillson.ca