Asking the right questions is crucial in the homebuying process. While many questions should be directed to your For Sale On Georgian Bay agent about the property, it’s also important to ask yourself various questions to ensure this decision is the best for you, your family, and your future. Whether it involves conducting more research or running the numbers on a spreadsheet, these questions will be key to making the biggest purchasing decision of your life.
So, what should you ask? Often, the most basic questions are the most vital. Let’s explore what you need to find out before starting the process of purchasing a home.
7 Questions First-Time Home Buyers Should Ask
Here are seven questions first-time home buyers should ask:
Do I Have a 20 Percent Down Payment?
A 20 percent down payment is an essential component of the home buying process. However, it can be difficult for the typical household to accrue a sizable down payment in today’s Canadian real estate market. The main advantage is that having 20 percent of the purchase price ready allows you to borrow less, pay less interest, and trim your monthly payments.
If you do not have at least 20 percent, you may be required to pay mortgage insurance premiums from the Canada Mortgage and Housing Corporation, or CMHC.
Will I Qualify for a Mortgage?
When you begin house hunting, the best immediate step you can take is to get pre-approved for a mortgage. By qualifying for a mortgage, you know how much you have available and at what rate. But will you qualify for a mortgage? This is what top lenders will require or consider:
- Income
- Employment status
- Credit
- Down payment
- Stress test
- Debt service thresholds or debt-to-income (DTI) ratios.
What Are the Hidden Costs of Purchasing a Home?
Gone are the days of simply obtaining a mortgage and receiving the keys to your new home. Today, there are many layers to the home buying process, and, as a result, there will be various hidden costs to factor into your budget. Here is a brief list of what you can prepare for:
- Land Transfer Tax
- GST/HST
- Title insurance
- Land survey
- Condo fees (if applicable)
- Mortgage default insurance (if applicable)
- Legal expenses
- Hook-up costs
- Moving expenses
Can I Afford to Maintain a Home?
Home ownership can be expensive as there are many fixed, variable, and emergency costs you will experience every month. In other words, your household will need to budget for more than just the monthly mortgage payments. Here is what you can anticipate to spend on during the coming years:
- Home insurance
- Utilities
- Property taxes
- Maintenance (mowing the lawn and watering the grass, for example)
- Household repairs or replacements.
- Water heater rental
- Condo special assessments
And this is just the tip of the financial iceberg.
Should I Book a Home Inspection?
Home inspections are imperative for homebuyers. They ensure that the home you are buying is in good condition and will not require expensive repairs, renovations, or replacements once the property is transferred to you. While it is an added expense of a few hundred dollars, it is an investment that could help you trim the selling price if you find anything wrong with the house.
How Old Is Everything Anyway?
When you come across a house that has piqued your interest, it is essential to determine how old the appliances and major systems are, such as the washer and dryer, refrigerator, water heater, roof, electrical system, and HVAC systems. If they are new, you are less likely to face issues than if they were as old as the neighbourhood.
Is This the Right Neighbourhood for Me?
Do you wish to own a home in your current neighbourhood, or do you wish to branch out somewhere else, be it a large city or a small town? This is something important to consider, especially when you factor in other elements, such as schools, transportation, nearby amenities, your office, and other day-to-day items essential to your living standards.
Final Thoughts for First-Time Home Buyers
Buying a home is a significant milestone in your life. Home ownership is a part of the Canadian Dream. Because it is a substantial investment, you need to do your due diligence and in-depth research to ensure that you have made the right decision for you and your household. You should never be cavalier when buying a property. Ask any and all questions, even if you think they are silly – your For Sale On Georgian Bay agent is here to answer them!