Is homeownership right for you?

Buying a home is one of the biggest financial decisions you’ll ever make, so prepare yourself to make an informed choice.

Although buying a home almost always seems like a great idea, it is important to understand what homeownership involves. Of course, being a homeowner is something to be proud of but it also means having to invest money, time and energy and take on added responsibilities. So, before you decide to buy a home, make sure you’re ready.

Make sure you're comfortable before you take the plunge on your first home purchase.

Here are some things to consider:

• Financial Security. If housing prices rise, your home can provide you with some financial security due to gaining equity.
• Stability. Having a place of your own.
• Financial Stress. Coming up with the down payment, meeting regular mortgage payments and other ongoing costs can tie up some of your cash, and can put considerable stress on your finances.
• Maintenance. Keeping your home in good shape requires time and money.
• Responsibility. You alone are responsible for payments, repairs and maintenance.
• Flexibility. You can decorate or renovate your home to meet your family’s tastes and needs.

Get Your Copy Of Our
Home Owner's Guide

There's more to figuring out whether homeownership is right for you, and our custom home ownership guide will help you figure it all out. 

We'll help you weigh the pros and cons of homeownership and our guide gives you a space to map out your needs and wants to help you make an informed decision.

Are you financially ready to own a home?

So, you’ve decided that homeownership is right for you. Now you need to determine if you are financially ready to buy a house. In this step, you will find a number of simple calculations that you can do to evaluate your current financial situation, how much house you can afford and the maximum home price that you should be considering.

Test Yourself

To avoid any future surprises, you can do some financial exercises to see where you stand. They include calculating your net worth, determining your current monthly expenses and what your current monthly debt payments are.

Knowing your net worth is important because you will need this information when you discuss a mortgage with us. Your net worth is the amount left over once you’ve subtracted your total liabilities from your total assets.

It will also give you a snapshot of your current financial situation and show you how much you can afford to put as a down payment. Below and on the following pages, you will find some useful tools that you can use to help you better understand if you are financially ready, and what you can afford as a homeowner.

Get Your Copy Of Our Home Ownership Guide

Want to test yourself to see where you stand financially? 

Grab your copy of our home ownership guide to get access to our full pre-home purchase budgeting table and guidelines.

How much home can you afford?

Now that you have a clear picture of your current financial situation, it’s time to find out what you can afford in monthly housing costs. Lenders follow two simple affordability rules to determine how much you can pay.

The first affordability rule is that your monthly housing costs shouldn’t be more than 39% of your gross household monthly income. Housing costs include monthly mortgage principal and interest, taxes and heating expenses—known as P.I.T.H. for short. For a condominium, P.I.T.H. also includes the monthly condominium fees.

Lenders add up these housing costs to determine what percentage they are of your gross monthly income. This figure is known as your Gross Debt Service (GDS) ratio. Remember, it must be 39% or less of your gross household monthly income.

Calculating your Gross Debt Service & Total Debt Service Ratios

Use our free home owners guide to dial in your GDS and TDS ratios.

Get Your Copy Of Our Home Ownership Guide

Making sure you've properly calculated your GDS and TDS ratios is a critical step to take before applying for a mortgage. 

We can help you figure out all the details. Get our free guide to start your own calculations.

How much will it really cost?

Once you have figured out the home price range you can afford and the type of mortgage you qualify for, you will need to calculate the associated costs of the transaction to make sure you are financially ready.

Upfront Costs

You will need to plan to cover the many upfront costs of buying a home. Timing is important to help make sure things go smoothly.

Get Your Copy Of Our Home Ownership Guide

There's more to this list of upfront costs — we're just scratching the surface. Grab your copy of our free home ownership guide and jump to pages 14 and 15 to unpack more of the upfront costs associated with buying a home to make sure you're not caught off guard.

What type of house should you buy?

Your Current and Future Needs

Before you start searching for a home, you need to think about your needs both now and in the future. Here are some things to consider:

There's a lot to think about!

Location, Location, Location

Even if the home you choose has everything you need, the location might not be appropriate.

You should consider whether you want to live in a city, a town, or the countryside. Also take into consideration how far away from work you are and how easy it will be to get to work, plus how much commuting will cost.

New Home, Previously Owned or Build Your Own?

When thinking about the kind of home you want the first thing you should consider is whether you want a previously owned home (often called a resale), or a new home.

Get Your Copy Of Our Home Ownership Guide

Deciding whether to buy an old home or a new home is huge decision. There are pros and cons to weigh.

Grab a copy of our free home ownership guide to go over all the upsides and downsides to either option.

Understanding your professional home buying team

The Mortgage Professional

Well, this one almost goes without saying, right?

More and more consumers are discovering the benefits of utilizing the services of a professional Mortgage Broker to help them secure financing for their homes. Why is this? It is simple really.

The banks are filled with a lot of great people who are knowledgeable, friendly and do good jobs. The challenge is that they are employees of the bank. That means that their first responsibility is to look out for the best interest of their employer. It also means that they can only offer you a single line up of products.

As your iSask Mortgage Broker, I have access to many different lenders, some that are simply not available to the consumer except through the services of a mortgage broker. This means that you, as my customer, have greater choice and can truly customize your home financing. It also means that generally I have access to lower rates. More choices and better rates results in the best solution for you!

Do you have to pay me for my service? Mortgage brokers usually get paid by the lender so our service to you is offered without charge.

Pictured here: your friendly neighbourhood mortgage broker!

Here's a quick overview of the rest of your team

Real Estate Agent

A Realtor® is an integral part of your homeownership experience. Their job is to find you a home, write the contracts, negotiate on your behalf, and to provide you with important information about the home and the community. They can provide you with details that would take you hours of research, or you may not have access too, and can help you make an informed decision about your purchase.

The Lawyer

You need a real estate lawyer or a notary to protect your legal interests, such as ensuring the property you are thinking of buying does not have any building or statutory liens or charges or work or clean-up orders associated with it. They will review all contracts before you sign them, especially the Offer (or Agreement) to Purchase. Having a real estate lawyer involved in the process will give you peace of mind and ensure that things go as smoothly as possible. Law associations can refer you to lawyers who specialize in real estate law.

The Insurance Broker

An insurance broker can help you with your insurance needs, including property insurance and mortgage life insurance. Lenders insist on property insurance because your property is their security for your loan. Property insurance covers the replacement cost of your home, so premiums may vary depending on its value.

The Home Inspector

You should consider having any home you are thinking of buying—whether it is a resale home or
a brand-new home—inspected by a knowledgeable and professional inspector. An inspection by a home inspector is a visual inspection.

The Appraiser

An appraiser estimates the market value of a home at a point in time. Your lender may also request for a recognized appraisal to complete a mortgage loan.

The Builder/Contractor

If you are buying a newly constructed home, you will have to hire a builder or contractor. If the house you are buying needs renovations, you may also require a builder or contractor.

Get Your Copy Of Our Home Ownership Guide

We're only scratching the surface of outlining the ins and outs of your professional home buying team. 

You can explore the full details of what each of these professionals do by grabbing a copy of our free home ownership guide.