As immigrants, one of the big choices we make after we get fairly comfortable is buying a home of our own.
Sorry, a house. Because there is a difference, but that’s a topic for another day.
My family did the same.
For the record, we only rented a place for one year after which we moved into our own property, and we’ve been living in the same place for the last eight years.
When we rented, our all-inclusive rent was $825 per month. Two bedroom, fully-furnished, gas, water, cable, Internet and electricity included. In case you’re wondering, it was a basement.
We thought it made sense to pay a little more for our own apartment since the house would be ours, our payments would build equity, and we would own the entire building, not just the basement.
Then came mortgage qualification.
We set out to qualify for mortgage, and we were pre-qualified for a handsome amount which sounded so unbelievable – less than one year after arrival in Canada.
But, “does it make sense”, we wondered?
Back in Nigeria, securing a mortgage was akin to a camel passing through the eye of a needle. It was available but to qualify was a different story.
My parents had a number of properties to their names most of which were built using personal savings and some mortgage. I recall that for one of the properties, it almost did not end well but eventually, it did, and they paid it off.
But for us, like other newcomers, Canada is a totally different landscape, and so we took caution to get educated on creditmatters and homeownership. We found Momentum Calgary, and we went through their courses FREE of charge.
Armed with all the essential information, we eventually secured a property that utilized less than 50% of what we were qualified for. In addition, our monthly payment was only slightly more than what we were paying as rent. It was the best decision that we ever made.
As a family, when we lost our primary source of stable income, the decision to live way below our means saved us from losing the house and helped us maintain our standard of living. Had we utilized even 70% of what the bank was ready to loan us initially, we would have been in trouble. Big trouble.
Making a buying decision such as a principal residence is not an easy one. Not at all. There are several factors to consider. Several. But it is crucial you get educated before you make such decisions. No need to hurry.
In 8 years, we only called our lender ONCE to delay our payment and that was when we realized that we didn’t own the house, we only swapped landlords. We quickly changed our minds.
And 9 years into our journey in Canada, we have never missed payment on ANY bill. Not once.
That sounds laudable but when I say debt is sexy, it means the allure never really leaves you.
And eventually, we fell.
Stay tuned for the rest of the story.
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Written by Dapo Bankole.
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