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About

We live here and know the area really well. We have been selling homes and managing properties, and we know how to get results!

Starting Your Search for a new home in Saskatoon, Canada? 

Any Canadians wanting to secure a mortgage must be tracking their credit score.

A score of 680 is at minimum required to secure a mortgage.

Being Pre-Approved for a mortgage will streamline the process as most of the necessary documents will already be in queue.

In order to borrow money for your home a lump-sum of money needs to be paid upfront and is known as a down payment. The amount needed is dependant of your situation, whether it is 5% or 20%. Just remember if you are paying less than 20% you will need to get mortgage default insurance.

After you are pre-approved for a set amount it will be much nicer to find a home within your budget and save you time and grief in future and sellers will be more willing to work with you!

A mortgage is a tool that helps facilitate real estate transactions, allowing parties to purchase an interest in land while financing a portion of the purchase price.

It is not a loan. The mortgage grants an estate in land to the lender as security for a loan made by a lender (the mortgagee) to the borrower (mortgagor). It is considered a security because the borrower is providing the interest in land as collateral in addition to the borrowers promise to repay the loan.

Granting of mortgage is in effect by a written contract, known as a mortgage agreement. The primary obligation is the repayment of borrowed money.

LENDER

BORROWER

Called a Mortgagee

Called a Mortgagor

Provides a loan to borrower

Obtains loan from lender

Receives mortgage as security for loan

Grants mortgage as security loan

Happy Home Searching!

https://www.ratehub.ca/mortgage-affordability-calculator

Down Payment

Your down payment is a benchmark used to determine your maximum affordability. Ignoring income and debt levels, you can determine how much you can afford to spend using a simple calculation:

  • If your down payment is $25,000 or less, you can find your maximum purchase price using this formula: down payment / 5% = maximum affordability.
  • If your down payment is $25,001 or more, you can find your maximum purchase price using this formula: down payment amount – $25,000 / 10% + $500,000. For example, if you have saved $50,000 for your down payment, the maximum home price you could afford would be $50,000 – $25,000 = $25,000 / 10% = $250,000 + $500,000 = $750,000.

Any mortgage with less than a 20% down payment is known as a high-ratio mortgage, and requires you to purchase mortgage default insurance, commonly referred to as CMHC insurance.

Mortgage Pre-Approval

This is very important and recommended that buyers get pre-approved for a mortgage before starting their new search for a home. It speeds up the mortgage process and helps you find out how much you will be able to afford in a new home purchase. This way your time isn’t wasted looking at homes out of your budget.

Being pre-approved gives you a competitive advantage as sellers prefer to deal with buyers who are financially qualified to through with a deal. And if you are in a situation with multiple offers, a pre-approval will be helpful.

Getting Pre-Approved in Saskatchewan not only helps the mortgage process move along faster but generally streamlines the whole process due to supplying most of the documents a lender will need to make a decision about approving your mortgage application.

Types of Mortages in Saskatchewan

  1. Conventional Mortgage
  2. Fixed-Rate Mortgage
  3. Adjustable-Rate Mortgage
  4. Bridge Loans
  5. Home Equity Line of Credit (HELOC)
  1. Conventional Mortgage

20% Down payment or 5% Down Payment

If you choose to go with 5% Down Payment, it will be considered a high-ratio mortgage and you are required to pay mortgage default insurance or CHMC insurance, as this protects the lender (bank).

Mortgage Default Insurance providers buyers with benefits such as decreasing the mortgage rate as you are insured for this money in case your payment defaults due to an unforeseen circumstance.

Lower rate can possibly mean more buying power, giving you a bigger bang for your buck on your investment.

  1. Fixed-Rate Mortgage

Popular option for Mortgages and for first-time home buyers, giving you steady and predictable mortgage payments every month. With this option, the interest rate stays the same during the entire duration of the home loan, keeping your payments unchanged.

  1. Adjustable Rate Mortgages

Attractive Option as the interest late can be lower than a fixed-rate mortgage, but the interest rate fluctuates causing a change in your mortgage payment amount. The rate may go up or may go down. It is primarily for buyers that may sell their home sooner than a normal home buyer.

  1. Bridge Loans

For people who have bad credit and cannot get approved for a traditional mortgage, it’s a short term solution. Allows consumers to access lower interest rates in the near future.

  1. Home Equity Line of Credit (HELOC)

This option allows you to borrow money against your home otherwise known as a second mortgage. You are borrowing against the equity in a home, providing you access to money for other purposes.

What is a credit score?

Credit score is a number that represents a risk a lender (bank) will be willing to undergo before they provide you with any type of loan. It is the overall score of your financial health.

Low credit scores will make it tough to get a mortgage, auto loan, personal loan or any type of loan.

Lenders use credit scores to assess the likelihood of you (borrower) paying back this loan. Lenders aren’t too friendly with loaning out money to someone that has trouble making their payments on time.

Even if you are approved with a “high” credit score , your interest rate may be higher compared to a borrower with a “lower” score.

Alternatives to Low Credit Score:

Co Signor

Guarantor Loan

Bad Credit Lenders

Improving your Credit Score (may be the best option to gauge your long term success in your investment)

Mortgage Amortization Period

You are given a certain amount of time to pay off your mortgage, most commonly it is a 25 year loan.

A short amortization period is beneficial if you want to pay off your mortgage in a shorter amount of time and paying less interest overall during the duration of the loan.

A longer amortization period is beneficial because lower monthly payments and can make your monthly payments more affordable.

The option is up to you and your current financial state.

Tips to Improve your credit score

  1. Pay your bills on time
  2. Keep your Credit Card Utilization at 30% (if possible)
    1. Look at your Credit Card statements from the last 12 months
    2. Add the Statement balances for each month across all your credit cards and divide by 12
    3. That is how much credit you use each month
  3. Don’t apply for many loans at once
  4. Don’t close any credit cards with balance on them
  5. Keep old credit lines open

People with the best credit scores often have credit utilization of 30% or lower.

There isn’t a super fast way to get your credit score higher as it takes time but the more efficiently you are able to pay off any outstanding loans : student loan, credit card loan, car loan, etc. the faster it will go up. Be patient and be smart with your spending.

Separate your needs and wants. 

Just because you are pre-approved doesn’t mean you can afford it! – Taxes, Insurance, And Mortgage Default Insurance is a factor in the final decision as well!

Common underwriting criteria mortgage lenders use:

1. Total Mortgage payment should be no less than 28% of your gross monthly income

2. Your Total Debt payments (existing plus the new mortgage) should be no more than 40% of your gross monthly income.

Our advice : Keep a healthy credit score and save as much as possible. Buying your first home can be strenuous process and we will be here to guide you through this but it is up to you to get your financial status in a healthy condition as this will serve as the basis for your bank loan.

Popular Books for Canadians:

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