Metro reporter Robyn Young will be taking readers on a whirlwind tour of the trials and tribulations of buying her first home. Check back every week for her accounts.
There’s a funny feeling that goes along with being a first-time home buyer that I can only liken to that of playing Monopoly.
You’re dealing with hundreds of thousands of dollars but not one red cent of it ever passes through your own fingers.
Although I haven’t officially closed on my new condo purchase, I got to sign my initials about a dozen times on a document called the Agreement of Purchase and Sale.
I knew I was agreeing to hand over just under $300,000 to a stranger for a piece of property I’d only looked at twice (I believe I may have spent more time choosing a new deodorant) and it didn’t even phase me.
The only explanation I could think of was that it feels like it’s not real money I’m dealing with and most of it is not my money.
I went to the bank, said I wanted to borrow $270,000, signed a bunch of papers, initialed a bunch more and … Bob’s your uncle. Well, to be fair, maybe it wasn’t quite that easy.
About three months ago, when I decided it was time to start seriously looking for a place to call home, I visited my friendly neighbourhood bank and sat down with a financial advisor.
After a number of questions about my income, savings and debts, he came up with an amount the bank would be able to loan me, gave me a semi-official piece of paper that confirmed I was good for about $315,000 and sent me on my way saying: “Good luck in your search; call me when you’ve found a place.”
When I found my new condo, it was just under $300,000, I figured I was good for the money, signed on the dotted line and then called up my bank guy.
I handed over five per cent, or about $15,000 of my own money as a deposit for the seller and knew I had another $15,000 ready in the bank for the remainder of the down payment on closing day.
When I walked into my bank guy’s office he said: “Congratulations, you found a place! Did you put in a condition for financing?”
“Pardon me?” I asked politely.
He explained that it’s common to write a condition on financing into the Agreement of Purchase and Sale, as a safety net for the buyer.
In other words, if your mortgage approval falls through, you’re not held to the purchase or the hundreds of thousands of dollars.
I stared at him blankly and asked what would happen if my approval fell through; would it be up to me to quickly scrape together $300,000?
“We’re not going to talk about that,” he said with a smile. “It’s not going to happen.”
It seemed to take a nail-bitingly long time for the final approval on my mortgage to come through —about four or five days.
During that time I waited, called my banker daily and wished I’d added a condition for financing to my purchase agreement.
In the end my mortgage was approved and all’s well that ends well.
I’m now in debt for an amount of money I’ve never even come close to handling in Parker Brothers bills, but at least I’ve got a good, reliable bank backing me up.
I figure it will start feeling a little less like play money when my first mortgage payment is swiped from my account, however.
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