CHAPTER 8 Shopping for a Home Loan or a Home Loan
The decision to buy a home puts you into a realm full of things you have not dealt with prior, especially if you used to rent your home. Owning a house brings a whole new experience. For example, consider taxes and mortgages. In Canada, mortgage interest is not tax-deductible. However, understanding your mortgage is a powerful financial planning tool, and it's essential to factor in all associated costs when considering your annual budget. Other nondeductible items include home repairs, general closing charges, as well as property hazard insurance premiums. Once you own a house, you’re a property owner, with the attendant obligation to pay property taxes. In most regions in Canada, the usual method of paying property taxes is to include the amount of annual taxes within the mortgage payment. In this case, the mortgage servicer will pay the taxes as they are due. Depending on your location, however, you may opt to pay your property taxes directly to the municipality. When first buying a house, your lender will calculate the total amount of real estate taxes, as well as the number of days in a property tax year that you were the owner of the said property 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 63
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