Your Complete Guide to Buying a Home in Alberta

Buying a home in Alberta starts with knowing what you can afford and getting your financing organized before you start making offers.

You will need money for your down payment and closing costs.

You should also account for ongoing expenses such as mortgage payments, property taxes, utilities, insurance and maintenance.

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1. Figure Out How Much Home You Can Afford

Do not start with the maximum mortgage a lender is willing to give you.

Start with a monthly housing cost that fits comfortably into your budget.

Consider:

• Mortgage payments

• Property taxes

• Home insurance

• Utilities

• Condo fees if applicable

• Maintenance and repairs

Leave room for emergencies and other financial goals.

2. Save Your Down Payment

The minimum down payment depends on the home's purchase price.

For an insured mortgage:

• $500,000 or less: minimum 5%

• More than $500,000 but less than $1.5 million: 5% on the first $500,000 and 10% on the remaining amount

• $1.5 million or more: minimum 20%

If your down payment is below 20%, mortgage default insurance is generally required.

Do not use every dollar you have for the down payment. You will still need money for closing costs and expenses after you move in.

3. Consider First-Time Home Buyer Programs

If you qualify as a first-time home buyer, two federal programs can help with your down payment.

First Home Savings Account

An FHSA lets eligible first-time buyers save for a qualifying home.

You receive $8,000 of contribution room in the year you open your first FHSA. Contributions are generally tax-deductible, and qualifying withdrawals can be tax-free.

Home Buyers' Plan

The Home Buyers' Plan lets eligible buyers withdraw up to $60,000 from their RRSP to purchase or build a qualifying home.

You can use the HBP and make a qualifying FHSA withdrawal for the same home if you meet the requirements for both programs.

4. Get Mortgage Pre-Approval

Getting pre-approved before seriously shopping for a home gives you a clearer idea of what you can finance.

A lender will typically review things such as:

• Income

• Existing debt

• Credit history

• Down payment

• Employment

• Mortgage amount requested

A pre-approval is useful for setting your price range, but it is not the same as final mortgage approval.

Your lender will still need to approve the specific property you decide to buy. Canada's consumer guidance recommends getting pre-approved before beginning your home search.

5. Find the Right Property

Price is only one part of the decision.

Consider:

• Neighbourhood

• Commute

• Schools

• Property taxes

• Age and condition of the home

• Condo fees

• Future maintenance

• Resale potential

If you are buying a condominium, review the condominium documents and financial condition of the corporation before removing conditions.

6. Make an Offer With the Right Conditions

Once you find a home, you can submit an offer to purchase.

Your offer may include conditions such as:

• Financing

• Home inspection

• Review of condominium documents

• Sale of your existing property

Conditions give you time to complete important checks before becoming fully committed to the purchase.

In Alberta, home inspections are commonly included as a condition of residential purchase contracts. Home inspectors must also be licensed.

7. Get a Home Inspection

An inspection can identify problems with major parts of the property.

This can include:

• Roof

• Foundation

• Plumbing

• Electrical systems

• Heating and cooling

• Exterior

• Signs of water damage

If significant problems are discovered, the inspection condition may allow you to renegotiate or walk away depending on your contract.

8. Hire a Real Estate Lawyer

A lawyer handles important parts of the closing process.

In Alberta, a lawyer may review the title for liens or other registered interests. They can also review the real property report and help complete the transfer of ownership.

Your lawyer also coordinates the funds required to close the purchase.

What Are the Closing Costs When Buying a Home in Alberta?

Budget for expenses beyond your down payment.

Common costs include:

• Legal fees

• Home inspection

• Land title registration

• Mortgage registration

• Property tax adjustments

• Home insurance

• Moving expenses

Alberta does not have a traditional land transfer tax. However, buyers pay Land Titles registration fees and a registration levy based partly on the property's value.

The current levy uses a sliding scale of $5 for every $5,000 of property value for land transfers and mortgage registrations.

What Should You Check Before Closing?

Before the closing date, make sure:

• Your mortgage has final approval

• Your down payment and closing funds are ready

• Home insurance is arranged

• Your lawyer has the required documents

• Any purchase conditions have been satisfied

• You understand the final amount you need to provide

Your lawyer will arrange the transfer of title into your name when the transaction closes.

What If You're Buying a New Home in Alberta?

If you are buying a newly constructed home, check its new-home warranty coverage.

Alberta maintains a property registry where buyers can check warranty status, warranty provider and the date coverage began.

Also review exactly what is included in the purchase price. Upgrades, landscaping, appliances and other items may not always be included.

Is Buying a Home in Alberta Worth It?

That depends on your finances and how long you expect to stay.

Buying can make sense when you:

• Have stable income

• Have enough for a down payment and closing costs

• Can comfortably afford the monthly expenses

• Plan to stay long enough for ownership to fit your goals

Do not buy simply because you qualify for a mortgage.

The better approach is to buy a home that leaves enough room in your budget for savings, repairs and normal life expenses after the keys are handed over.