Written By Guest Author Michelle Thompson
I am SO excited to be sharing this post because it’s a topic that I’m super passionate about & one that I get asked about a LOT on my channels. Living in arguably the hottest real estate market in the country (Toronto), and having now purchased several homes, I know how daunting the process can be and feel obliged to share my learnings —
To start, I’ll give you some background on my personal homebuying journey (spoiler, it does not involve being rich, and yours doesn’t have to either if home ownership is a goal!). My (now) husband and I bought our first condo back in 2016. We only put down 5% which is an incentive in Ontario that many first time homebuyers don’t know is available, and that has really been the catalyst for what has happened since (buying a fixer upper, renting out the condo when we moved into said fixer upper post-reno, eventually selling both to fund buying our current property and now, a year and a half later, building our dream home on it. We also have 4 rental properties and one other multi-family development in the works). In reality, when we moved into that first condo, our mortgage was less than what I had been paying in rent, and of course, we were paying into our own equity versus a landlord’s.
BUT leading up to buying that first condo, I was told from a handful of different lenders that I couldn’t afford it, wouldn’t get approved for the amount I needed and one ‘financial advisor’ even told me I could only realistically aim to buy a home in TEN years. All awful advice, that had I listened to, would have greatly affected my options now. Luckily, I have parents who are very financially literate and helped guide me, but if you’re not so lucky, that’s where a Pineapple broker comes in. They are an innovative, modern mortgage brokerage that offer a ‘people first’ approach which resonates so much with me. They are dedicated to getting you the best rates in the country and they focus on having the best trained agents to offer better assessments based on data to help you understand what you can actually afford. Another thing they offer is super streamlined underwriting… that’s the process where your mortgage is actually being written for you to sign with all the details (like your rates & mortgage amount) that you’ve discussed. This is KEY in a fast paced market where most often to be competitive you can’t make an offer conditional on financing. With our current home, we were months outside of any opportunity to back out before we got our actual documents (and that was with a very healthy down payment). So it gives you an idea how slow the banks can be.
Obviously, based on that point, you can probably guess that we worked with a traditional bank for our mortgages and every. single. time. the process has been like pulling teeth. Especially if you (and/or your partner if you’re buying with someone) are self-employed like in our situation, it is HELL on earth. That’s why when I learned about Pineapple, I wanted to pay it forward and share on it!! Working with a broker gives you access to the best rate across lenders and based on your situation, so while you still may end up with a mortgage from the bank if that’s where your comfort lies, you won’t have the headache!!
My story highlights a few key things, and some not so obvious ones:
– misinformation can hold you back from entering the market… I have SO many friends who tell me they can’t afford to buy without even knowing what they’d be approved for or what the process is to buy. I also know so many people who used their money to rush to pay off ‘not bad’ or even interest-free debts (like student loans) and looking back wish they had used it to enter the market earlier instead.
– your first home does NOT have to be a massive detached house in the most expensive neighbourhood. A condo for example, or town home, duplex or semi, or buying something pre-construction, is a GREAT starting point to enter the market and still build equity (& pretty quickly!) in a market like Toronto.
– you don’t have to move hours away from the city IF you are willing to put in work. I feel like everyone in my age group wants a ‘pinterest’ home or what they see on social media, but if you want that turn key, it is WILDLY expensive. Hence why we flipped our last place & have lived in our current one trapped in the 70s for the last year and a half. It’s not glamourous at all, but we could never afford the house we’re building otherwise. It is more than ok to work your way up!!
– a broker can also help you with more niche info based on your needs … for example, going with a variable vs. fixed rate is probably your best bet if you’re going to be moving often like us to avoid penalties. If you’re in the market and don’t know the difference, this is your sign to call Pineapple now!!
– even though prices are high right now, mortgage rates are historically low and that will be reflected in your monthly payments. So even if your purchase price or down payment is higher, what you owe monthly can very well end up being lower compared to a lower price/higher rate environment.
Overall, this post is just a snapshot of the homebuying picture and that’s why having a mortgage broker you can build a longstanding relationship with is so important (did I mention Pineapple offers regular touch bases even after you’re in your home?). If you’re in the market, I hope you’ll look into Pineapple for your expert advice, and as always, I’m happy to answer any more basic stuff based on my personal knowledge if you drop me a comment or DM! x
Michelle Thompson is a Toronto-based content creator, documenting lifestyle topics, motherhood with two young babies and home renovation projects. Along with her husband, they have renovated several properties and are currently in the midst of building and designing their family home, as well as a multiplex development. You can find her on Instagram @intl_peach