his appearance on BuzzTV<\/a>, BuzzBuzzHome\u2019s weekly Facebook Live broadcast.<\/p>\nDon\u2019t buy it just because you can afford it<\/h2>\n
\u201cThe first mistake that I see is buying too much house,\u201d says Cooper. Just because you can qualify for a $800,000 mortgage doesn\u2019t mean you should take one on. Cooper says some homebuyers don\u2019t take the time to crunch the numbers with all their expenses in mind.<\/p>\n
So while a homeowner may have been able to afford a stacked townhouse rather than a high-rise condo, there is a risk involved. \u201cThey can easily find themselves house rich and cash poor with no money to save, let alone have fun. And I don\u2019t think that\u2019s a good way to live for the next 25 years,\u201d he explains.<\/p>\n
Put aside money for closing costs<\/h2>\n
Cooper says another common mistake he sees first-time homebuyers and others make is not budgeting for closing costs. \u201cClosing costs are the transactional cost of real estate when you\u2019re buying a home,\u201d he explains. Such expenses include home-inspection fees, land transfer taxes and real estate lawyer fees.<\/p>\n
These expenses typically add up to as much as 4 per cent of the purchase price of a home. \u201cIt\u2019s not a couple hundred dollars. It\u2019s thousands of dollars or tens of thousands of dollars,\u201d he says. \u201cUnless you want to get on your hands and knees and beg the in-laws at the eleventh hour for money\u2026 I would definitely put some money aside.\u201d<\/p>\n
If you rent out your place, screen your tenants thoroughly<\/h2>\n
Renting out part of your home can be a way to help make monthly mortgage payments \u2014 Cooper did so himself, occupying the basement of his home \u2014 but the wrong tenant could cost you. \u201cIt\u2019s easier to screen out a bad tenant than it is to evict them once they\u2019re living in your house because tenants have a lot of rights,\u201d Cooper explains.<\/p>\n
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. \u201cTheir current landlord might just be saying something nice to get rid of them\u00a0they don\u2019t like them,\u201d he adds.<\/p>\n
Have a goal and stick to it<\/h2>\n
For Cooper, the hardest part of paying off his mortgage was staying motivated, and FOMO (the fear of missing out) didn\u2019t help. \u201cI 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,\u201d he recalls. Goals like that can keep you focused.<\/p>\n
\u201cI 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,\u201d says Cooper. Once his house was paid off, Cooper knew he could work less and travel. \u201cIt\u2019s definitely important to have that idea of why you want to pay it off so that you\u2019re motivated to pay it off sooner,\u201d he says.<\/p>\n
For more tips, watch Sean Cooper\u2019s interview on BuzzTV:<\/p>\n
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