Sometimes when buying a home things don’t work out and you have to move NOW! Or like in 4 days. Where do you go? Do you rent another place last minute, and since it’s last minute, that place is not ideal for your family or situation? Then you know you are looking again soon. Hard decision to make when you live in this area, the market really fluctuates here depending on the oil industry and puts people in chaotic situations.
Building credit is hard when rent is top dollar, it’s very tough to save money for those mortgage downpayments (as always) and still keep the same lifestyle you are used to. Not many people are willing to make the changes necessary in their budgeting to relieve this stress. It is a hard decision, sometimes on the pride too but there comes a time to put an end to the spending and in our situation it was the best decision we have ever made.
I had a recent client with a great pre-approval amount from the bank, this was a start on his new path and higher end home range. Chose a house and offered, bank approves, but with 5% downpayment he required lending insurers (ie: CMHC, Genworth) who did NOT approve. This is a common scenario, sometimes the bank is more lenient than the loan insurer. Notice was given to his landlord and he thought since the bank was a yes, he was golden… smooth sailing ahead!
Now, where will he go? Here’s where plan B has to happen. Buy a much lesser house (equal to that years rent, yes we have those!) is what he chose. It is also what I would have done! At least most of the money will come back when you sell, even if all of it doesn’t, you would have lost all that anyway in rent. Not ideal as you can imagine there will be work to do on this house…but still a step closer to the dream home as he can build up that credit and stay put in his own house until the time is right. Sometimes smart last minute decisions happen, and luckily for me, this was an awesome, happy-go-lucky guy with a positive outlook on the stressful situation.