Saskatoon Real Estate

When I bought my first house in Saskatoon only a few years ago I needed to have 5% as a down payment. This was all fine and dandy in the house market in Saskatoon in 2006 when I had time to “save” for a down payment without worrying about the market going up too much more in 3 months than it took me to save (I am sure I was saving for longer than that though). As a first time home buyer in Saskatoon I was able to use my RRSP’s and put those towards my 5% down. That was very helpful as otherwise I probably wouldn’t have been able to buy a house in Saskatoon. I probably would have taken advantage of the 0% down had it been available at that time.

Our government is trying to ensure that we do not fall into the same avalanche of lending disaster as the US and this is one of the ways they see to attempt to keep our Canadian housing market strong and to risk us going down the same road as the US. One major difference is that, to buy a house in Saskatoon and in Canada in general, we have to have more than a mere pulse. In the US anyone with a pulse was getting a mortgage. I see it with car sales, if you have a beating heart you can get a car, but it is not that easy for buying a home in Saskatoon.

I don’t disagree that the government has to be prudent so that we don’t find ourselves in trouble, but I don’t agree that we are in the same situation as the US. What I do think though is that first time home buyers in Saskatoon sometimes have their sights set very high. Instead of getting a ‘starter house’ in Saskatoon or a ‘starter condo’ in Saskatoon, many first time home buyers in Saskatoon want to jump into their dream home the first crack at it. I do know of several people who would rather continue to rent something that is deemed ‘nicer’ instead of buying something a bit smaller and owning it. Some of what we are experiencing with people overextending actually comes from not wanting to live within your means. So, maybe instead of pulling the pin on Zero down, the lenders should be helping people determine what they can afford comfortably and why it may be of benefit to start smaller and work your way up when buying a house in Saskatoon.

Just my opinion though as I was one of the lucky ones who bought when our Saskatoon real estate market was still slow and cheap.

For additional information on this story or any other questions about the Saskatoon real estate market feel free to contact me!

Kari Calder
Saskatoon Real Estate Agent
Century 21 Conexus Realty Ltd.

In an effort to ensure that Canadians do not come even close to falling to the subprime mortgage woes and despair that the US has been facing, the decision has been made by CMHC to end 40 year amortization periods for home buyers. The 40 year mortgage was only put into place last year as home prices across Canada were on the rise, making it hard for first time home buyers in Saskatoon as well as first time home buyers in Canada to purchase a new home. The theory was to keep monthly payments low, but this also means more risk.

I, personally, at first hated the thought of a 40 year mortgage. Working with so many first time home buyers in Saskatoon though, I began to see the benefits and am still undecided if I agree with CHMC no longer backing it. Just because someone was buying a home in Saskatoon under the 40 year amortization period to get started did not mean that Saskatoon home buyer had to stay with the 40 year mortgage for 40 years. This is a way to get people into the market. In theory, a person’s annual salary should increase, not decrease, throughout their life, which should make it easier to increase your monthly payments after your first term, thereby decreasing the amortization to 30 years, 25 years, etc.

Many financial advisors and institutions did not like the 40 year mortgage as they were worried the buyers would not be able to survive a shift in economy, but out of the 40% of 40 year mortgages many of them were entrepreneurs who finally found a way to finance their small businesses.

By killing the 40 year mortgage, CHMC was trying to protect us from overextending and possibly not being able to pay back their loans. One of the biggest users of the 40 year mortgage though was not only the first time home buyer in Saskatoon, but it was also entrepreneurs across Canada. So, not only will it be harder for first time home buyers in Saskatoon after October, it will be harder for small business owners as well.

So, if you are contemplating getting into the Saskatoon housing market and are not able to go the 25-30 year route, you better get into the Saskatoon housing market before October if you want to take advantage of the 40 year mortgage.

For more information on this or if you are looking to buy or sell a home in Saskatoon or the surrounding area be sure to contact me!

Kari Calder
Saskatoon Real Estate Agent
Century 21 Conexus Realty Ltd.