As we move into the busiest part of the holiday season mortgages are the last thing on most peoples’

minds.

I’ve been working on a home purchase for a young client that is set to close the week before Christmas. This file has reminded me of how important it is that people do their homework before writing an offer to buy a home.

My client lives and works in northern BC. He moved from the Okanagan to complete his apprenticeship. He is very careful with his finances. He chose to share a basement suite with a fellow employee rather than rent an apartment. He has been saving a significant chunk of his pay the entire two years he’s been there and has a sizable down payment.

You’d think this application would be a slam dunk.

What he did not do was establish a credit history. He has paid cash for everything he has, including

choosing to pay cash for a used truck rather than financing a new one even though he would have no

issues making the payments.

I tried several different lenders to see if we could get an exception to the lack of credit history using

alternative credit sources, but due to the remote location I could not find a suitable option.

We ended up adding his parents to the application and the plan is to remove them from the mortgage in two to three years once he has an established credit history.

His case is a bit unique in that he had a significant down payment but that was not enough to get an

approval for him.

In most areas of the province, saving the down payment is often a challenge. If you are a first time home buyer, one thing I’d encourage you to do is open a First Home Savings Account so that your down payment funds are out of reach and working for you.

If you have been saving already and haven’t opened FHSA yet, it might be a wise idea to open one

before the end of the year so you are able to contribute for 2023 and enjoy the tax break for your

contribution.

If you are starting to think about buying a home over the next few years, I encourage you to speak to a

mortgage professional early on to make sure you are doing everything you can to make sure you are

ready to move forward.

Thank you so much for the support and feedback during the last year. I appreciate the people that have connected to ask questions about the mortgage process and look forward to a less challenging interest rate environment for 2024.

Wishing you and yours a wonderful holiday season filled with much love and laughter.