Since last October I have been working with a couple who would eventually come to be First Time Home Buyers. When we initially met, she was and is currently a full-time student and he is a full time worker for the city they live in. He was also in a consumer proposal.
Unfortunately, a life circumstance had affected their finances and they ended up seeking a consumer proposal. His beacon was in the high 500’s and she did not have a beacon score, being a full-time student. When we first sat down, it did not look good. The only thing going for them, was a sizeable gift from a family member.
They had two small children and were living in a rental and the landlord was selling so they had to go. Instead of moving into yet another rental, we began to put a plan together to get them out of their rental situation and into their first home. Thankfully the landlord was giving them 6 months to find a solution so we got to work!
We started by putting a plan together.
The first step was to pull their credit and check that there were no errors. We also looked for ways to bump his credit, while establishing hers with a secured credit card.
The second step was to guage where their fitness level was? What does this mean? Well I had to find out if they had a budget and if not we had to build one. Unfortunately, like many people, they had no idea where to start. So we sat down and put a budget together to see where they currently stood and where they would need to be in order to qualify for that mortgage they wanted. We looked at everything from rent, utilities, gas expenses, car, insurance, groceries, entertainment and even babysitting to see where they could save. This exercise alone saved them $250/month that went into paying down the consumer proposal that much quicker.
The third step was to determine how much house they could afford. The key here was working with a realtor who understood budgeting and sticking to a purchase price that I had set out as a limit. The potential homeowners, while looking around for a home, had “pie in the sky” ideas of what their home should look like having seen too many HGTV shows. Thankfully, as a team we were able to keep them grounded in reality.
The next step was to look for a mortgage lender, who would allow the incorporation of their consumer proposal. With this solution, they were able to afford the home they wanted and start off on a great foot with no more consumer proposal hanging over their heads and a brand new budget to start off right!
Are you in a similar situation? Please reach out and I can help you find a solution for homeownership today! Financial ruin does not have to be a death knell. Speak to a professional mortgage broker today – we can help!
To your Wealth!