At Cantiro, our purpose is to create the environments for amazing lives to happen. That starts before you’ve ever owned one of our homes or lived in one of our communities. We’re here to help educate you on the homebuying process to ensure you find an amazing place for your life—whether it’s a Cantiro home this time or not.
Buying your first home requires time and effort. But knowing what you’re diving into can make the home buying process much more manageable, and help you make a confident decision.
Before starting your home search, the very first thing you should is determine how much home you can afford. Realistic expectations are set, your search criteria becomes streamlined, and you avoid any potential disappointment.
Mortgage affordability calculators can help you see how much house you can afford before discussing this further with a bank or mortgage specialist. It’s important to understand the current interest rates offered by banks or mortgage lenders as well.
Getting prequalified is different than getting preapproved. When it comes time to put a mortgage in place to purchase a home, you can get preapproved for the loan, which involves providing your financial documents (paycheck stubs, bank account statements, etc.) so your lender can verify your financial status and credit.
Lenders generally recommend that no more than 30 – 32% of your annual gross household income should go to housing expenses – principal, interest, property tax & heating.
Part of your affordability calculations is also determined by how much down payment you are able to put into your home. While in some cases a 20% down payment is required or recommended, many people opt to put down 5% instead, allowing them to get into the market much faster. Gift money from your family is also an option to help you with your down payment, however please note that this must come from a direct family member and the bank will need to verify that the money is in fact, a gift and not a loan.
It all comes down to your own financial situation. A mortgage is a loan given by a bank or mortgage lender to help you buy a home.
You will not be expected to do these calculations yourself, but it’s important to understand how the lenders calculate your affordability.
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 $25,000 or more, you can find your maximum purchase price using this formula:
(Down Payment Amount – $25,000) / 10% + $500,000 = Maximum Affordability
For example, let’s say you have saved $50,000 for your down payment. The maximum home price you could afford, based on the calculation would be: ($50,000 – $25,000) / 10% + $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. Mortgage insurance is calculated based on a percentage of your total purchase price and varies depending on how much you put down. It is automatically worked into your mortgage and can be rolled into your mortgage payments or paid in full at the forefront.
There are three mortgage default insurance providers in Canada:
There are some requirements you have to meet in order to qualify for mortgage default insurance:
In 2017, the federal government introduced a mortgage stress test for anyone that was applying for a mortgage. It was created to ensure that homeowners are able to afford their mortgage payments in the event that interest rates increase in the future.
When applying for a mortgage, the bank will offer you an interest rate based on your credit score and other financial factors, however, they will require you to qualify at the benchmark rate or your approved rate plus 2%, whichever is higher. As of June 1, 2021, the rate is 5.25%
In this case the benchmark rate of 5.25% is higher than the qualified rate of 3.99%, so the banks will use 5.25% for the stress test.
Start visiting real estate, builder and/or developer websites that have local real estate listings. Make note of particular homes you are interested in and see how long they stay on the market. Also, note any changes in asking prices or other home details. This will better set you up for success when it comes to offering a market fair price or negotiation.
It’s important to know what type of home you’re looking for, whether you’re single, couple/engaged, growing family or full family. Every house has various features, floor plans and design functionality to best suit people’s needs. Townhomes and duplexes have neighboring walls with other residents but offer a great amount of space at a fraction of the price that single family homes offer. Single family homes (front drive or rear laned garage) offer larger spaces with additional bedrooms, bathrooms and living space, but at a higher cost. It’s all about what size, features, interior finishes, and upgrades work best for your family within your price range.
Have you heard of Cantiro’s Life Collection™? We have 21 single-family homes meticulously designed with how you live at the centre of every decision, with each home created to support your family’s lifestyle. Take our Find Your Home quiz to discover which Life Collection home is right for you.
It’s time to make a list of requirements and preferences for your home. Consider the following factors and questions in your list.
Once you have your list, viewing homes in-person is an important way to get a true sense of what matters most to you in a home. You can visit and explore some of our newest homes at a time that’s convenient for you by scheduling a self-guided tour or by booking an appointment with the builder.
One tool that may help you sort out your preferences is the Cantiro Life Collection™ quiz. It will show you whether you should look for a home that supports a daily life focused on your family, your career, or entertaining others. Take the quiz here.
If you choose to purchase a new build home, you can work directly with the Area Sales Manager in that community. The Area Sales Managers from the builders offer expertise of the community and building process, and are your partner throughout the entire buying and building process.
Real estate agents can be a good resource when you’re buying a resale homee. They can provide you with helpful information about homes and neighbourhoods that aren’t easily accessible to the public. Their knowledge of the home buying process, negotiating skills, and familiarity with the area you want to live in can be extremely valuable. It doesn’t cost you anything to use an agent – they’re compensated from the commission paid by the seller of the house.
After you’ve narrowed down your selections, start looking at the details of what’s important for you and your family. Which one do you like best and could see yourself living in? Weigh out the needs versus wants.
If you’re buying a new build home, an initial deposit will be required to a “hold” on that home. At Cantiro, the initial deposit will be combined with the offer to purchase on any spec home (a home that is already selected by the builder or currently under construction). If you are buying a pre-sale home (building from the ground up), your deposit is a non-cashed cheque that will be valid for 2 weeks to finalize your plans, upgrades and pricing. The cheque is only cashed once the offer is solid and will be applied to your down payment.
Work with your Area Sales Manager or real estate agent to negotiate a fair offer based on the value of comparable homes in the same neighborhood. If you’ve made an unconditional offer, that means you’re certain you want to buy a property and that you’re able to complete the transaction. On the other hand, a conditional offer means that the sale of your home is subject to other factors and events. You can make your offer subject to multiple conditions, and if the conditions are not met, you can back out of the sale without paying a penalty or losing your deposit.
Common conditions include:
Note: Conditions provide you, as the buyer, some level of protection by returning your deposit if conditions are not yet. However, in an event of multiple offers on a home, the seller will often choose the deal with the least amount of conditions.
The seller will review the conditions, purchase price, requested possession dates, and any other details of your offer. Once negotiations from both sides come to an agreement, the builder or seller will accept the offer.
Most home sales and purchases have at least a few standard conditions (financing approval, satisfactory home inspection report, etc.) that form part of the formal Agreement of Purchase and Sale. These conditions must at some point be “fulfilled / satisfied” or “waived / removed” for the agreement to be binding upon the parties and the transaction to proceed to closing. The most common condition is financing approval. Here is when you will work with your lender and supply all the necessary paperwork to get approved, such as your employment record, and select the right loan for you. As a general rule, if waiving fulfillment of a condition could materially affect you, be very sure you wish to remove that condition. The best rule of thumb is to not sign anything until your lawyer gives you the go-ahead to do so.
In order to help maximize your flexibility and minimize disruptions/complications, it’s recommended you ensure your mortgage rate is held or adjustable. Also keep your current living accommodations open to extensions until the time that you receive a firm possession date letter from the builder/seller.
Part of the financing approval process is to select the right mortgage for you.
Every home buyer has their own priorities when choosing a mortgage. Some are interested in keeping their monthly payments as low as possible. Others are interested in making sure that their monthly payments never increase. And still others pick a loan based on the knowledge they will be moving again in just a few years.
Consult a mortgage specialist for overall guidance and support. You could work with a mortgage broker, who deals with a variety of lenders free of charge, or talk to a mortgage specialist at your bank. Some things you’ll want to consider:
With a fixed rate, the amount you pay towards your interest and principal remains consistent during the entire length of your term. They are more stable and predictable, and a good option when you anticipate interest rates to rise in the future.
Variable rate mortgages generally have a lower rate to start but cango up or down as interest rates change. With a variable interest rate, you can keep your payments the same for the duration of your term, but the amount that goes towards your principal mortgage fluctuates with the rate. Lenders call this a fix payment with a variable interest rate.
You also have the option to opt for an adjustable payment with a variable rate. With adjustable payments, the amount of your payment will change if the rate changes.
You can also choose between open or closed mortgages. Closed mortgages offer lower rates with less flexibility. Most banks will allow you to put in extra payments towards your mortgage every year up to a certain percentage of the original principal amount, but fees may apply if you exceed this amount.
Open mortgages offer more payment flexibility but at higher rates. This option is great for those you plan on paying off their mortgage early and want to avoid any associated penalty fees.
This is the length of time a mortgage rate and conditions set out by the lender are in effect. Terms can range from six months to up to 10 years, but are typically 5 years.
This is the total length of time it will take you to pay off your mortgage. 25 years is a common amortization period. A longer amortization period usually means lower monthly mortgage payments. It can also mean you’ll pay more interest overall because you’re taking longer to pay back the mortgage principal to the lender.
Example: (based on a $500,000 home)
Try it for yourself: Mortgage Amortization Calculator
You will also have the flexibility to choose the frequency of your mortgage payments. While monthly payments remain the default choice of many home buyers, there are a number of other options available, including: semi-monthly, bi-weekly, accelerated bi-weekly, weekly and accelerated weekly. Keep in mind that the more often you make payments the more you will save on interest over the life of the mortgage.
Example: (based on a $500,000 home with 5% down payment)
Typically, purchase offers on resale homes are conditional on a home inspection of the property to check for signs of structural damage or things that may need fixing. This contingency protects you by giving you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage.
Both you and the seller will receive a report on the home inspector’s findings. You can then decide if you want to ask the seller to fix anything on the property before closing the sale. Before the sale closes, you will have a walk-through of the house, which gives you the chance to confirm that any agreed-upon repairs have been made.
With a new home build, home inspections are not necessary, although you may still request it as part of your negotiation. Prior to the possession of your new home, several third-party inspections would have already taken place during different stages of construction such as electrical or plumbing. New homes also include a new home warranty to protect your investment, which will be discussed further in Step 16.
Note: Lenders will arrange for an appraiser to provide an independent estimate of the value of the house you are buying, if you have a 20% deposit. The appraiser is a member of a third-party company and is not directly associated with the lender. The appraisal will let all the parties involved know that you are paying a fair price for the home.
Most builders or sellers require a deposit or downpayment that’s at least 5% of the purchase price as it tells the seller your finances are in order. In general, the deposit amount is guided by the purchase price as well as how quickly you’ll be closing the deal.
When the sale does close, this deposit will be applied against the total purchase price and becomes part of the down payment. For unconditional offers, your deposit is lost if the sale doesn’t close, whereas offers that have conditions attached, such as the need for a property to pass a home inspection, would see a deposit returned to you. If make an unconditional offer and change your mind about purchasing the house, not only will you likely lose your deposit, but you could also face a potential lawsuit for any damages suffered by the seller.
Real estate lawyers offer a multitude of services that aid their clients in purchasing or selling a home. They take the legal matters related to the purchase or sale entirely off your hands. Legal jargon can be a tough field to navigate and making a simple mistake can be costly. This particularly rings true if you are buying a home for the first time.
Real estate lawyers review all legal documents, such as the Agreement of Purchase or Agreement of Sale and, in the case of a condo purchase, the Status Certificate. They ensure property taxes are up-to-date and no claims are listed against the property. They also confirm if there is a valid title and calculate the land transfer tax that is due upon closing. Additionally, your lawyer is responsible for transfer of funds from bank to builder or bank to seller’s bank. After funds have been transferred and approved, this is when you’ll receive keys/possession to your new home from your real estate agent.
Hiring a lawyer to go over your contracts and provide a better understanding of your buying process is always a good idea. Look for a local lawyer that works for your needs.
Utilities in a home include electricity, gas, water, sewer, internet, telephone, cable TV, security systems and, in some areas, trash collection. These essentials are the things you need in daily life to ensure you have a working, comfortable, livable space.
Research the various providers in your area online and by speaking to your real estate agent, property management company, or the previous homeowner. Usually there will be only one provider option for water, sewer and trash collection because these are public utilities. You’ll likely have multiple choices for electricity and gas retailers, as well as companies to provide security, internet, cable TV and telephone services.
If you’re in the same city or service area and already have an account with the local utility company, they will likely be able to transfer service to your new home and keep your account open. Let them know the service end date at the old home and the start date at the new home.
When it’s time to turn on the utilities at your new place, a technician will stop by to take care of the task. You likely won’t need to be home while your basic utilities are set up but check with the company beforehand in case the technician needs access. Internet and cable installers may require you to be home to let a tech inside to work.
If you are a brand-new customer and haven’t set up utilities before, call the local utility company or visit their office to find out what they need from you before they connect services. You may be able to take care of this online, but if you have questions, it’s easy to get a straightforward answer from an employee.
Immediately after the sale is finalized, you should contact your insurance company and purchase home insurance so it’s in place for when you move in. Home insurance can often be bundled with auto insurance to help save costs.
Do your research before choosing an insurance provider, making sure they are reputable and well-reviewed. You can also choose to work with an insurance broker who will recommend an insurance provider who meets your needs.
If your home sustains major damage, the insurer and company will rebuild it to builder specs. That’s why it’s important for your insurance to include planned or completed improvements. This will ensure items you add to your home, like new flooring or a deck, are also covered.
Property taxes are collected by your municipality to help pay for municipal services. You can pay these taxes in a lump sum or incorporate them into your regular mortgage payments. It usually takes the city two to three weeks after possession for your new purchase/record to finalize.
With a new construction sale, your contract will include a final walkthrough and several other walkthroughs during the construction process. Typically, you will have one during the electrical installation and one after kitchen cabinets have been installed. Each builder is a little different so please ask your decided sales representative for clarification.
Our Quality Control process takes place one week prior to the pre-occupancy orientation. This includes looking for deficiencies, testing mechanicals, running all plumbing, etc. Anything found during this period is forwarded to the site superintendent who calls the necessary trades to be addressed.
We meet our clients in their new home. We spend around 2 hours walking the homeowners through the house including going over the operations of mechanical systems, maintenance schedules, and recording any deficiencies that were missed during the quality control phase.
At closing, you will sign off on all the paperwork required to complete the purchase, including your loan documents. It typically takes a couple of days for your loan to be funded after the paperwork is returned to the lender. Once the cheque is delivered to the seller, you are ready to move into your new home.
Note: Depending on when you take possession of your home, there will be seasonal items that may not be addressed before you move in, mainly exterior items such as parging, eavestrough, sidewalk and driveways, rough grade and landscaping. These outstanding items are noted by the builder and will be addressed when the winter months are over.
Our team will meet you in your brand new home and confirm that any deficiencies noted during the pre-occupancy walkthrough have been addressed. Paperwork is signed and keys are handed once the funds have been transferred over.
Typically, after purchasing your home the builder will schedule a follow up walkthrough to ensure that everything is running properly and up to your desire. Builder walkthroughs can be scheduled and completed between 6 months to a year after living in the new home.
Shortly after possession, our Client Care Coordinator will send an email welcoming you to the Cantiro family and include your login info for your Customer Connect account.
Customer Connect is a program that will automatically send a reminder email to you to submit any warranty requests you may have. This takes place at the two-month mark. Once you submit your list directly on the Customer Connect portal, we schedule an inspection day where we meet you in your home and review the items with our Quality Control team. Some items are minor and can be taken care of by our site technicians. If trades are required to fix others, we will schedule a separate trade day where we and said trades show up and repair the agreed upon items.
The two-month warranty described above is repeated at the 11-month mark.
Alberta’s New Home Warranty Program also protects your investment in a new home. The following elements are guaranteed as part of this mandatory coverage:
Learn more at anhwp.com
If you are pleased with your sales representative and builder, be sure to leave a review on any of their platforms and send over referrals!