Photo: James Bombales/Flickr

Many Canadians manage to pay off a mortgage in their lifetime. Sean Cooper did it in three years at the age of 30 and in Toronto, one of Canada’s priciest real estate markets.

Cooper recently stopped by BuzzBuzzHome’s Toronto office to promote his book, Burn Your Mortgage, which is billed as “the simple, powerful path to financial freedom for Canadians.” In it, Cooper relates his own experience and dishes out helpful pointers for those aspiring to homeownership.

Here are four takeaways from his appearance on BuzzTV, BuzzBuzzHome’s weekly Facebook Live broadcast.

Don’t buy it just because you can afford it

“The first mistake that I see is buying too much house,” says Cooper. Just because you can qualify for a $800,000 mortgage doesn’t mean you should take one on. Cooper says some homebuyers don’t take the time to crunch the numbers with all their expenses in mind.

So while a homeowner may have been able to afford a stacked townhouse rather than a high-rise condo, there is a risk involved. “They can easily find themselves house rich and cash poor with no money to save, let alone have fun. And I don’t think that’s a good way to live for the next 25 years,” he explains.

Put aside money for closing costs

Cooper says another common mistake he sees first-time homebuyers and others make is not budgeting for closing costs. “Closing costs are the transactional cost of real estate when you’re buying a home,” he explains. Such expenses include home-inspection fees, land transfer taxes and real estate lawyer fees.

These expenses typically add up to as much as 4 per cent of the purchase price of a home. “It’s not a couple hundred dollars. It’s thousands of dollars or tens of thousands of dollars,” he says. “Unless you want to get on your hands and knees and beg the in-laws at the eleventh hour for money… I would definitely put some money aside.”

If you rent out your place, screen your tenants thoroughly

Renting out part of your home can be a way to help make monthly mortgage payments — Cooper did so himself, occupying the basement of his home — but the wrong tenant could cost you. “It’s easier to screen out a bad tenant than it is to evict them once they’re living in your house because tenants have a lot of rights,” Cooper explains.

On top of a credit cheque, he recommends phoning references, and not just a friend and current landlord, either. Ask to speak to their employer as well as past landlords. “Their current landlord might just be saying something nice to get rid of them they don’t like them,” he adds.

Have a goal and stick to it

For Cooper, the hardest part of paying off his mortgage was staying motivated, and FOMO (the fear of missing out) didn’t help. “I would see my friends having fun and going on all these trips, but what kept me motivated at the end of the day was my long-term goal of achieving financial freedom,” he recalls. Goals like that can keep you focused.

“I had that kind of picture of financial freedom in my mind and I knew each day when I woke up I would be one step closer to achieving it,” says Cooper. Once his house was paid off, Cooper knew he could work less and travel. “It’s definitely important to have that idea of why you want to pay it off so that you’re motivated to pay it off sooner,” he says.

For more tips, watch Sean Cooper’s interview on BuzzTV:

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