Questions First-Time Homebuyers Should Ask
Asking the right questions is essential when buying a home. Here are nine key questions for first-time homebuyers to consider:
- What Is My Purchase Budget?
- Determine your budget based on the average home prices in your desired location.
- Adjust your expectations or location to match your financial capabilities.
- Do I Have a 20 Percent Down Payment?
- A 20 percent down payment reduces the amount you need to borrow, lowers interest payments, and avoids mortgage insurance premiums from the Canada Mortgage and Housing Corporation (CMHC).
- Will I Qualify for a Mortgage?
- Understand what lenders require, including:
- Income
- Employment status
- Credit score
- Down payment amount
- Passing the stress test
- Debt-to-income (DTI) ratios
- What Are the Hidden Costs of Purchasing a Home?
- Prepare for additional costs such as:
- 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?
- Budget for ongoing expenses, including:
- Home insurance
- Utilities
- Property taxes
- Maintenance (e.g., lawn care)
- Household repairs or replacements
- Water heater rental
- Condo special assessments
- Should I Book a Home Inspection?
- Ensure the home is in good condition to avoid unexpected repairs or replacements.
- Use inspection results to potentially negotiate a lower price.
- How Old Is Everything Anyway?
- Check the age of appliances and major systems like:
- Washer and dryer
- Refrigerator
- Water heater
- Roof
- Electrical system
- HVAC systems
- Is a Real Estate Agent Necessary?
- Consider hiring a real estate agent to save time, money, and effort.
- Benefit from their expertise in buying and selling properties.
- Is This the Right Neighbourhood for Me?
- Evaluate the neighbourhood based on:
- Schools
- Transportation
- Nearby amenities
- Proximity to your office
- Overall suitability for your lifestyle
Final Thoughts for First-Time Home Buyers
Buying a home is a significant milestone and a substantial investment. Conduct thorough research and ask all necessary questions to ensure you make the right decision for your household. Remember, no question is too small or silly—your realty man agent is here to help!
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