A 12-Month Timeline for Smart Buyers 

Many buyers think the home buying process starts when they begin touring properties. In reality, the most successful buyers start preparing their finances months before they ever make an offer.

If you're thinking about buying a home in Ontario within the next year, creating a financial preparation plan can make the difference between smooth mortgage approval and unexpected roadblocks.

Below is a 12-month timeline outlining what buyers should do, and avoid, to prepare financially for homeownership.

12 Months Before Buying

The “Just Looking” Phase

At this stage you may simply be browsing listings online and exploring neighbourhoods. While it feels early, this is actually the best time to start preparing your finances.

What Buyers Should Do . . . Is Check your credit score

Mortgage lenders rely heavily on credit scores when determining eligibility and interest rates. Reviewing your credit report early allows time to correct any errors and improve your score if needed.

Start saving for your down payment

In Ontario, buyers typically need:

• Minimum 5% down payment
• 1.5%–4% of the purchase price for closing costs

Starting early makes it easier to accumulate the funds you'll need.

Track your monthly spending

Understanding where your money goes each month will help determine a comfortable mortgage payment and overall budget.

Research first-time buyer programs

Depending on your situation, you may qualify for programs such as:

• Home Buyers’ Plan (RRSP withdrawal)
• Land Transfer Tax rebates
• First-time buyer incentives

These programs can significantly reduce upfront costs.

What Buyers Should NOT Do

Avoid these common mistakes early in the process:

❌ Ignore credit card balances
❌ Co-sign loans for friends or family
❌ Open multiple new credit accounts
❌ Assume online mortgage calculators reflect actual lender approval

9 Months Before Buying

Strengthening Your Financial Profile

At this stage your goal is to make your financial profile look as strong as possible to lenders.

What Buyers Should Do . . . Reduce debt where possible

Your debt-to-income ratio plays a major role in mortgage approval. Paying down high-interest debts such as credit cards or personal loans can significantly improve borrowing power.

Maintain stable employment

Lenders prefer consistent employment history, so stability in your job situation is important during this period.

Continue building savings

Automating savings into a dedicated down payment account can help you stay disciplined and grow your purchasing power.

Understand the full cost of homeownership

Mortgage payments are only one part of owning a home. Buyers should also budget for:

• Property taxes
• Utilities
• Insurance
• Maintenance and repairs
• Condo fees (if applicable)

What Buyers Should NOT Do

❌ Make large purchases such as vehicles or expensive furniture
❌ Switch jobs unnecessarily
❌ Miss credit card or loan payments
❌ Allow credit card balances to exceed about 30% utilization

6 Months Before Buying

Mortgage Preparation Stage

Now it’s time to start preparing for the mortgage approval process.

What Buyers Should Do . . . Speak with a mortgage broker

A mortgage professional can estimate:

• Your maximum purchase price
• Monthly mortgage payments
• Down payment requirements
• Mortgage options available to you

This step helps align expectations with reality before you start seriously shopping.

Organize financial documentation

Lenders will typically require:

• Recent pay stubs
• Notices of Assessment
• Tax returns
• Bank statements
• Down payment documentation

Preparing these documents early helps avoid delays later.

Continue growing your down payment

A larger down payment can reduce mortgage insurance costs and lower monthly payments.

What Buyers Should NOT Do

❌ Apply for new credit cards
❌ Finance or lease a vehicle
❌ Move large amounts of money between accounts without documentation
❌ Make unexplained deposits into bank accounts

3 Months Before Buying

Mortgage Pre-Approval Stage

You’re now entering the phase where you may begin actively searching for homes.

What Buyers Should Do . . . Get a mortgage pre-approval

A pre-approval provides several advantages:

• Locks in an interest rate for approximately 90–120 days
• Confirms your realistic purchase budget
• Makes your offers more competitive with sellers

Maintain financial stability

Even small financial changes can impact mortgage approval, so consistency is key.

Prepare for closing costs

Typical closing costs in Ontario may include:

• Land Transfer Tax
• Legal fees
• Title insurance
• Home inspection
• Appraisal

These costs are separate from your down payment.

Connect with a real estate professional

Working with an experienced agent early allows you to:

• Understand local market conditions
• Identify suitable neighbourhoods
• Develop a smart buying strategy

What Buyers Should NOT Do

❌ Change jobs before closing
❌ Make large cash withdrawals
❌ Finance furniture or appliances before your purchase completes
❌ Take on new personal loans