10 questions you probably have about buying a home - MoneySense

10 questions you probably have about buying a home

If it’s your first time buying, here’s some clarity

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Thinking about buying a home? It can feel like an intimidating process and you probably have about a million and one questions about this big step. Here are 10 helpful queries we’ve answered recently that might help you on your journey to homeownership.

1. Is this the right time to be buying a house?

So you want to buy a house but fear the market is going to crash any second? The market’s imminent crash has been predicted time and time again. Here is all you need to do to make the right choice.

2. How does your credit score affect your mortgage application?

What’s more important when applying for a mortgage: your credit utilization or credit-­to-­income ratio?
 And can you better your credit score by reducing your credit utilization? They’re both equally important but in different ways. See what you should do with your credit and the rule of thumb for debt when going for a mortgage.

3. What’s the best type of mortgage if you’re a first-time home buyer?

Make sure to factor in your timeline and whether flexibility of moving your mortgage is important to you. That being said, a five-year fixed rate mortgage is usually the most popular. But if you can’t decide, a hybrid mortgage might be the best choice for you.

4. How do mortgage payments actually work?

If you hike your monthly payments, should that decrease the amount of interest owed? Not quite. That’s a misconception you should clear up now.

5. Is skipping a home inspection a smart idea in a hot market?

Some are wondering if a home inspection is an outdated so-called requirement when buying a home. Even though it might be cumbersome, a home inspection is always a good thing to do. It shows sellers you’re serious and skipping one altogether comes with risks.

6. What should I be asking/looking for during an open house?

Besides the obligatory small talk, there are plenty of things you should be sure to do during an open house you’re attending. What’s the seller’s timeline? Why do they want to move in the first place? These questions could be eye-opening and help you gauge whether the home is right for you. Here are six more questions to ask.

7. Do I still qualify for the Home Buyers’ Plan? 

If you’ve lived common-law with someone who owns a home, you may not be considered a ‘first-time home buyer’ in the eyes of the Canadian government. Here’s what you need to know.

8. Should you focus on paying off your mortgage or invest that money instead?

If you have extra money left over after making your mortgage payments in a month, you could either double-down on paying down that massive debt OR put it into the stock market instead. If you’re young, you have time on your side. But does that mean you should favour investing over debt repayment? Here’s what to consider if you’re faced with such a decision.

9. Why can’t I deduct mortgage interest? 

If we’re talking about your primary residence, you’re out of luck. Those payments are definitely not tax deductible. But a rental, on the other hand is fair game. With a primary residence, however, you could write it off using “The Smith Manoeuvre.” Details here.

10. How can I get the new-home GST rebate?

If you’ve just bought a brand new home, you could be up for a GST/HST rebate. This is what you need to know about what the CRA will look for when you decide to apply.

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