CHAPTER 8 Shopping for a Home Loan or a Home Loan
Buying a home puts you into a realm full of things you have not dealt with previously, especially if you used to rent your home. Owning a house brings a whole new experience. For example, consider taxes and mortgages. When purchasing a home, it’s essential to understand what can be deducted and what can’t. For instance, in the US, a significant piece of information that many home buyers overlook is the impact of mortgage interest on their federal income tax payments. Still, you can not deduct the mortgage interest from your federal income tax payments in Canada. Some nondeductible items include home repairs, general closing charges, and property hazard insurance premiums. Once you own a house, you’re a property owner, with the attendant obligation to pay property taxes. The usual method of paying property taxes is to include annual taxes within the mortgage payment. The mortgage servicer will pay the taxes as they are due. When buying a house, your lender will calculate the total real estate taxes and the number of days you were the property owner in a property tax year, and add that amount to the mortgage payment. People have been known to spend months looking for the best possible home and eventually find a good one. However, many of these individuals fail to understand the importance of finding a good loan. In the end, the new homeowner has a lovely home, but a bad deal regarding the mortgage. Not many people can buy a cash house; most will require a mortgage. Therefore, you not only need to go shopping for a home, but you should also shop for the best loan deal. There are various types of loans available, and it’s best to research multiple 57
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