#MoneyMasterClass Recap–Week 20

Preparing to Buy a Home

Gail started on the topic of shelter last week with a conversation on renting not being a waste of money. She continued the rent versus own conversation this week, focusing on the math behind choosing to purchase a property.

I found these guidelines incredibly helpful. I never had a concrete place to start with planning and dreaming to buy a home. The math Gail’s laid out is a great way to start getting real about the financial reality of purchasing a property.

#MoneyMasterClass Thinking about buying a home of your own? Wondering if you're ready? pic.twitter.com/F3plZIPrtF
— Gail Vaz-Oxlade (@GailVazOxlade) May 12, 2020

#MoneyMasterClass Let me reiterate: Renting is NOT a waste of $$. It's a choice. pic.twitter.com/2jKSZ3vBJv
— Gail Vaz-Oxlade (@GailVazOxlade) May 12, 2020

#MoneyMasterClass Owning is a Big Step. Think carefully. pic.twitter.com/VhM7qiKY2T
— Gail Vaz-Oxlade (@GailVazOxlade) May 12, 2020

#MoneyMasterClass If you put < 20% down on a home, you’ll have to buy insurance from CMHC so that if you can’t make the payments the bank is off the hook for the loss. pic.twitter.com/OPquFsAmQJ
— Gail Vaz-Oxlade (@GailVazOxlade) May 12, 2020

Bankers are not your friends. Neither are Lenders.

Gail always says that the bank is not our friend. This week, she explained why the people who give us a mortgage aren’t either.

#MoneyMasterClass Think you're ready to buy a home of your own? Remember that lenders will give you more mortgage than you could afford to repay. You MUST work out what you can AFFORD based on your CASH FLOW.
— Gail Vaz-Oxlade (@GailVazOxlade) May 13, 2020

#MoneyMasterClass Lenders exist to lend. And the more they lend, the happier their bosses are. Since THEY don't have to pay the $$ back, and YOU do, figure out what you can afford before you get a mortgage approval.
— Gail Vaz-Oxlade (@GailVazOxlade) May 13, 2020

#MoneyMasterClass Let me say this again: The mortgage you qualify for should NOT be the determining factor is how much home you buy. pic.twitter.com/vNvy7IEkBr
— Gail Vaz-Oxlade (@GailVazOxlade) May 13, 2020

It was eye-opening to read the number of replies (such as this one and this one) to Gail’s tweets about lenders and realtors that tried to convince buyers to borrow more than they could afford.

#MoneyMasterClass Make your offer to purchase conditional on financing even if you've been pre-approved. pic.twitter.com/YmcTqX9as5
— Gail Vaz-Oxlade (@GailVazOxlade) May 15, 2020

Calculating the Cost

There are a number of things to include when calculating the cost of purchasing a home.

#MoneyMasterClass While you're calculating your costs, don't forget these: pic.twitter.com/V8DBaGDSNg
— Gail Vaz-Oxlade (@GailVazOxlade) May 13, 2020

#MoneyMasterClass RENTERS: Read your lease. Yes, I know that most of it sounds like gobbledygook, but if you don't read the fine print you may be in for a shock. pic.twitter.com/tFliYseAQ5
— Gail Vaz-Oxlade (@GailVazOxlade) May 14, 2020

Know Your Rights

Knowing your rights as a renter is so important. Ideally all landlords will be on your side, but even the most well-meaning can miss some basic rules.

#MoneyMasterClass RENTERS: Know the rules in your province for what landlords/renters can/can't do. If you don't take the time to familiarize yourself w the rules, YOU LOSE.
— Gail Vaz-Oxlade (@GailVazOxlade) May 14, 2020

#MoneyMasterClass Many leases require that you buy insurance for the unit you are renting so if your unit floods or someone slips and falls in your apartment, you're covered. Estimate about $300 a year depending on building age/location.
— Gail Vaz-Oxlade (@GailVazOxlade) May 14, 2020

Here are a couple resources for those that live in my area of British Columbia, Canada.

Residential Tenancy Act
Tenant Rights and Advisory Centre Website
BC Housing’s Tenant Handbook

Tenancy laws can vary by province, so make sure to check your local resources.

Have you considered buying a house and had a discussion with a lender about a mortgage? What was that experience like for you?

New to the Money Master Class? There’s still time to get started!
Check out this Twitter Archive to see all of Gail Vaz-Oxlade’s #MoneyMasterClass tweets from the start.
Find the resources, spreadsheets, and quizzes here: Money Master Class
Check out my weekly recaps to get caught up.
Start here with the Money Master Class Intro and Week One Recap

Check out Gail Vaz Oxlade’s books here:*

Money Rules
Debt Free Forever
CEO of Everything
Money Smart Kids

Preparing to Buy a Home

Bankers are not your friends. Neither are Lenders.

Calculating the Cost

Know Your Rights

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Preparing to Buy a Home

Bankers are not your friends. Neither are Lenders.

Calculating the Cost

Know Your Rights

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