Buying January 9, 2020

6 Questions to Ask Before Becoming a First Time Home Buyer

You’ve heard it over and over again, “Why are you still renting? You’re just paying someone else’s mortgage!” And, while that’s technically true, making the move from tenant to owner is a huge step, and one that should never be taken lightly! If you think you’re ready to start wading into the water of being a first time home buyer in Saskatoon, here are a few questions to ask before getting started:

1. Am I Financially Ready to Become a First Time Home Buyer?

Just because you’re “paying someone else’s mortgage”, doesn’t necessarily mean you can afford to pay your own just yet! The benefit of tenancy is the option to call it quits after the conditions of your term are met; you can just wipe your hands and walk away. As a homeowner, however, you’re making a 25 year commitment not just to the purchase of the home, but the upkeep, as well!

Some of the costs you’ll need to be financially prepared for when becoming a first time home buyer include:

  • Upfront Costs: the down payment (5-20% of the purchase price), closing costs (1.5 – 4% of the purchase price), and moving costs.

  • Ongoing Costs: monthly mortgage payments, property taxes, home insurance, utilities, condo fees (if applicable), repairs, and ongoing maintenance.

If you’re not sure how to calculate all this on your own, a Mortgage Calculator can be a great tool in giving you an idea of where you stand financially!

2. Am I Going to Use a REALTOR®?

For first time home buyers there is often quite a bit of confusion around real estate agents, especially when it comes to how much they cost. Well, I’m here to clear it up for you once and for all: as a buyer, using a REALTOR® will cost you absolutely nothing at all! That’s right—whether you decide to purchase or not, a home buyer will never pay a cent to use the services of a real estate agent, which means you are getting quite the bang for your buck.

For the low, low price of FREE, here are just some of the things your REALTOR® will help you with when buying your first home:

  • Market insight and years of experience to educate you in buying a home in Saskatoon

  • Writing offers & counter offers

  • Negotiating terms on your behalf

  • Post-sale assistance, up to and beyond possession day!


3. Do I Need to Get Preapproved for a Mortgage?

While it’s not an essential step in the process of buying your first home, getting preapproved for a mortgage can help better define what it is you can afford and set you up with some very realistic expectations as a first time home buyer. That way, you can keep your budget in mind and prevent yourself from falling in love with that riverfront home in City Park you just can’t afford.

Similar to working with a REALTOR®, getting preapproved for a mortgage is absolutely free and relatively painless if done right with the help of a professional mortgage specialist. Not sure who to work with? Our preferred partners at RBC work right here in the office and work with home buyers and sellers of all sorts each and every day, so you can trust that they know what they are doing!

4. What Am I Looking for In My First Home?

With so many listings to choose from, it can often be entirely overwhelming to know where to even start with your home search. And while a REALTOR® can be a great help, only you will know what you need in your home. Take a moment before you start your search to narrow down the playing field a little and save yourself the hours of scrolling through listings in the future. Think about everything from space to accessibility to what’s important to you. Don’t focus on the face value—paint colours, fixtures, appliances—which can all easily be brought up to snuff on a long weekend. Instead, look at what can’t be renovated away, like the number of bedrooms and the neighbourhood.

Then, with your narrowed search criteria, your real estate agent can better define which homes to show you and which ones to steer clear of. They can even set you up to receive automatic updates on new listings that match your exact criteria, so you’ll never miss a potential perfect property!

5. Am I Buying with My Partner?

Whether you are married or not, if you are considering buying your first home with your partner, the very first thing you’ll want to do is talk. Talk about your financial histories and how you plan on managing the payments moving forward. Will you be making separate monthly mortgage payments or opening a joint bank account where payments will automatically be withdrawn? And especially if you’re not married, you’ll want to strongly consider drafting up a contract about the expectations for each of you moving forward. No one is expecting the partnership to fail, but it’s always a good idea to be prepared just in case.

6. What Financial Assistance Options Are Available to Me?

To help first time home buyers make their way into the world of real estate, the Government of Canada has actually set out quite a few fantastic options for getting your finances in order. This includes:

The First Time Home Buyer’s Incentive, which helps eligible first time home buyers with the necessary down payment to finance between 5-10% of their home purchase on a shared equity plan with the Government of Canada. This helps to lower your monthly mortgage payment, and you won’t need to worry about repaying it for 25 years or until you’re ready to sell!

The Home Buyer’s Amount is a $5000 non-refundable income tax credit for qualifying homes purchased during the calendar year. It provides up to $750 in federal tax relief, helping to alleviate the costs associated with purchasing a home.

The Home Buyer’s Plan allows you to withdraw up to $35,000 in one calendar year from your RRSPs if you are buying  a home for either yourself or a relative with a disability.

The GST/HST New Housing Rebate allows you to recover part of the GST/HST you had to pay in buying your new home, if you qualify.

Becoming a first time home buyer can be a tricky and confusing time for many Saskatoon residents, but it can also be a very exciting one, too! And by asking the right questions up front and consulting with real estate experts, you’ll be more than prepared to handle the big change in your life, as soon as you’re ready to make it happen.