In a homeowner’s hindsight
Six things people wish they’d known before buying
Shoulda, woulda, coulda. If you’ve managed to make it through life with no regrets, you’re definitely in the minority. Even Frank Sinatra, who famously crooned “I did it my way,” had a few. But since buying a home is probably one of the biggest-ticket purchases you will ever make in your life, we asked a number of recent homebuyers to share with us some of the things they wish they’d known about the home purchase process.
1. Get your ducks in a row well in advance when it comes to financing. Chris Ryall lost the house of his dreams because of the amount of time it took to process all the paperwork. Ryall had already owned and paid off two houses, but after separating from his wife, he and his girlfriend wanted to buy a house together. “I figured getting financing would just be a formality,” he says. Ryall reasoned that he owns a business, has a credit score in the top 5 per cent and has been with the same bank for many years. But he couldn’t have been more wrong. “None of that meant diddly-squat,” he says.
First Ryall had to get a separation agreement in place (he’d never bothered since the breakup was amicable and he and his wife split things down the middle). On top of that, a staggering amount of paperwork was requested by the bank from articles of incorporation for the business, to several years’ tax returns and investment statements. “My scanner was in overdrive,” he says. By the time all the paperwork had been dealt with, it was too late — Ryall had to withdraw his home bid. The good news: The couple did manage to purchase a house in Burlington last July.
2. Do a credit check in advance. “Credit scoring agencies like Equifax and TransUnion can make mistakes,” Ryall says. His girlfriend’s credit score still reflected an old loan she had repaid long ago. And, as Ryall points out, every time some company does a credit check on you — for instance, when you’re changing cellphone plans or if you move and have to set up services in the new location — it can negatively impact your credit score. “Another thing I found out about credit cards was that even though I never reached anywhere near the maximum credit limit on my credit cards, just having them counted against me when it came to my credit score” Ryall says.
The reason: Credit scoring agencies consider the total amount of debt you can take on. If you have plenty of credit cards and higher limits, it could hurt your credit score. The upshot: It’s best to keep just a few cards with low interest rates, a regular payment history and low balances. 3. Opting for a condo? Read the rules and regs thoroughly. “I was surprised at some of the fees imple- mented by my condo board,” says Toronto personal finance blogger Barry Choi (moneywehave.com), who bought a Toronto condo last year with his wife Carla Salvosa.
“If we ever get locked out of our unit, we’ll be charged to have the concierge let us back in,” he says.
Although Choi and his wife haven’t yet been dinged for anything, he says some fees “still seem insane to me.” 4. Buying a new home? Think long term and upgrade the mate- rials. “We bought our house brandnew from a builder,” says Nancy Truman of Markham. “I wish we had known to upgrade the materials used at the time.”
Just 12 years on, Truman has already replaced the roof and the attic insulation. In addition, she says “the windows ice up and the garage door keeps falling apart.” Although upgrades aren’t cheap, unlike the list price of the home they’re negotiable, and generally the more you spend, the greater the discount. 5. Give yourself time to get out of one home and into another. Dan and Jasmine Young moved into their East York home in December.
“We closed on our new house and old house on the same day,” he says.
“That meant we had to be out of one house and co-ordinate getting into the other all on the same day. It added a ton of stress on top of having a pregnant wife in her third trimester!” If he moves again, Young says he will definitely co-ordinate the dates better and bridge the mortgage to give them a bit of a buffer. 6. Allocate some cash for repairs and upgrades. When Deanne Kelleher and Nando Tantalo bought their Woodbridge home four years ago, they opted to put in some sweat equity instead of paying someone to do the work.
“Painting isn’t crazy expensive and I personally hate doing it,” Keleher says. “But we did it anyway. Needless to say the trim still isn’t done in the family room . . . four years later.”
Chris Ryall had to withdraw a bid on a dream home due to an abundance of unexpected paperwork.