So we decided to buy a house, what will the journey look like?
There are plenty of easily-googlable resources on the house buying process in Canada and in Québec more specifically (here’s the two most detailed I’ve seen: FCAC and CMHC), so I won’t try to repeat that information, but I’ll document the specifics of our process which will invariably result in a brief outline of the steps to follow.
Roughly what we’ll try to do:
- Get a relatively good family income so we can qualify for a reasonable mortgage loan.
- Build up a credit history.
- Save up for a down payment.
We’ve worked on those first three steps since we moved to Canada: I’ve been fortunate enough to have a stable and well-paid job, which has allowed us to use consumer credit responsibly, so should have a pretty good rating. It also allowed us to save for a down payment. So at this point we should be ready for the next parts of the process:
- See a lender to get financially checked and pre-approved for a loan. You can go for a well-known financial institution, perhaps your bank, or you can go to a mortgage broker, which is what I’m planning on doing.
- Once you know your price range, you can start looking at houses in your desired areas.
BUT before you can start with this, you should know roughly how much you can afford, be realistic with your inputs and use one of the available online calculators. I like this one which will tell you how much you should be able to afford, and this one which calculates your estimated payments. And this one is very simple but also very detailed as to the criteria used to estimate affordability. It makes sense to use this so you’re not disappointed when the broker tells you you can only afford a tiny shack in the boondocks :).
You should also have a pretty good idea of whether you like your target neighbourhood. Montreal is a geographically large city and neighbourhoods can differ, so it makes sense to check the ones you like and make a short list. If you don’t care where you buy, there’s something for almost any price range, but I don’t think that’s very common.
A possible problem with the neighbourhood you like is whether you can afford it. If you can’t just yet, there are two options: choose a different one or get more money (higher salary, larger down payment).
Once I identified our target neighbourhoods, I started scouring centris.ca frequently, looking for houses in (and out of) our price range, checking their pictures and prices, nearby amenities, and comparing several possible neighbourhoods. We ended up discarding one of those, even though it was cheaper and had more inventory, because we decided we didn’t really like it that much. So we’re focusing on one of the other candidates, and also looking at adjacent neighbourhoods, which can be cheaper while still being closer to the amenities we want.
OK, so knowing how much we can afford (per the calculators) having located (and lived in) a neighborhood we like and knowing the approximate price range for homes here, and knowing it is within our affordability, I’m ready to hit the mortgage broker.