Are you considering buying a new house in the near future? Congratulations! There are many exciting aspects about buying a property and having a place that is truly yours. However, it’s important to have a solid homebuyers’ plan and to do your research before you begin contacting mortgage lenders and start the house hunting process. Do you have questions about the homebuying process? Check out our first-time homebuyers FAQ for questions to ask before buying a new house in Canada.
Homebuyers FAQ in Canada
Should I rent instead or buy?
While both renting and buying have their pros and cons, the decision comes down to what you prefer. There are advantages for renters such as management-provided maintenance and lawncare. However, buying your own home allows you to build equity with monthly payments and qualify for tax incentives to offset new expenses of being a homeowner. Many people choose to buy instead of renting for the following reasons:
- Tax breaks
- Financial gains
- Appreciation in value
- Capital gains
- Freedom to move whenever they need to
- A sense of pride
Am I financially ready?
Whether you choose to rent or buy a home, you need to be sure you can afford the monthly payments and continue to do so until your mortgage is paid off (in the case of owning a home). Some questions to ask yourself to determine whether or not you are financially ready include the following:
- Do I have a steady, permanent job?
- Is my current income sufficient for the monthly payments and more?
- Do I have enough saved for a down payment or first and last month’s rent?
- What is my bill paying history? Do I pay them on time?
- Do I have any outstanding long-term debts such as a student loan or car payments?
- Can I afford taxes, utilities, and insurance, on top of a mortgage?
Does my credit score look good?
A credit score gives you, your bank, and any possible lenders an idea of your financial standing. This number summarizes your credit history, which is affected by how often you pay your bills on time, how much debt you have, and other related habits. When buying a home, mortgage lenders check this score to decide whether you should receive a loan or not, and at what interest rate. Low credit scores make it less likely to get a loan when you need it. Before applying for a mortgage loan, you should get a credit report. With this information about your credit history, you can fix any errors to improve your score before you reach out to a lender.
How much of a down payment do I need?
The biggest challenge for people seeking to buy a home for the first time is saving for the down payment. Most lenders expect a down payment of 5% to 20%, and it varies depending on the lender’s requirements and/or the length and type of loan. Years before you consider buying a home, you should be making a budget, setting a goal, and sticking with your savings plan. Making sacrifices to avoid overspending early on will allow you to save more money each year and allow you to apply for a mortgage loan sooner.
How do I get the best mortgage?
Learning about various mortgage rates and terms takes time, and once you’ve found your dream home, you may not have time to research these things. To get the best mortgage, do your research beforehand. Before you begin looking for homes, research what you need to know to get the right mortgage for you.
What’s the difference between pre-qualifying and pre-approval?
Before you begin viewing prospective homes, you should find out how likely it is for you to get pre-approved for a home loan. Pre-qualification provides you with an estimate of what you will be able to borrow based on some financial information you give. This helps you estimate how much you could be spending to purchase a home. Pre-approval means a financial institution has agreed to work with you after seeing your financial situation. Compared to pre-qualification, pre-approval gives you more concrete answers to how much you can afford when buying a home.
Do you need a mortgage lawyer?
A qualified real estate lawyer can help you understand the terms and conditions of your forms and provide you with years of experience and advice to help you make the right decisions about buying a new home. It’s highly recommended that you work with a real estate lawyer to ensure your best interests are protected.
What happens at closing?
When closing time arrives, you will need to verify that you have obtained homeowner’s insurance and that you have secured the funds for your down payment and a loan from your mortgage lender. This documentation must be taken to the closing lawyer, where you will also be required to pay the closing costs. These costs include property taxes, origination, interest, survey or recording fees, and title insurance. There are some real estate lawyers that can provide you with fixed closing costs so you can better manage your budget without any hidden fees or surprises.
Choose Zinati Kay for Help Buying Property
Working with a real estate lawyer to buy or sell your home provides you with reliable, trustworthy, experienced insight into the process. They will ensure that you understand what you are agreeing to and that you get what you were offered. Need a mortgage lawyer? Look no further!
Zinati Kay – Real Estate Lawyers is a full-service residential real estate law firm that provides fixed closing costs to our clients when they buy, sell, mortgage, or title transfer their property. We have closed over 21,000 real estate transactions over the past 25 years and helped many of our clients navigate the often-confusing terms and conditions of their forms. We provide professional service and reasonable real estate lawyer fees and have thousands of satisfied clients to prove it. If you want a professional at your side as you buy, sell, refinance, or title transfer your property, contact us at (416) 321-8766 or e-mail us at firstname.lastname@example.org for more information about our services.