Buying a
Home: What Expenses to Expect
Budgeting for a new
home can be tricky. Not only are there
mortgage installments and the down payment to consider, there are
a host of other—sometimes unexpected—expenses
to add to the equation. The last thing you want is to be
caught financially unprepared, blindsided by taxes and
other hidden costs on closing day.
These expenses vary:
some of them are one-time costs, while others will take the form of
monthly or yearly installments. Some may not even apply to your
particular case. But it’s best to educate yourself about all
the possibilities, so you will be prepared for any situation, armed
with the knowledge to budget accordingly for your move. Use the
following list to determine which costs will apply to your situation
prior to structuring your budget:
- Purchase offer deposit.
- Inspection by certified
building inspector.
- Appraisal fee:
Your lending institution
may request an appraisal of the property. The cost of this appraisal
is your responsibility.
- Survey fee:
If the home you’re purchasing
is a resale (as opposed to a newly built home), your lending institution
may request an updated property survey. The cost for this survey
will be your responsibility and will range from $700 to $1000.
- Mortgage application
at your lending institution.
- 5% GST: this
fee applies to newly built homes only, or existing homes that have recently
undergone extensive renovations.
- Legal fees:
A lawyer should be involved
in every real estate transaction to review all paperwork. Experience
and rates offered by lawyers range quite a bit, so shop around before
you hire.
- Homeowner’s insurance:
Your home will serve as
security against your loan for your financial institution. You
will be required to buy insurance in an amount equal to or greater than
the mortgage loan.
- Land transfer (purchase)
tax:
- Moving expenses.
- Service charges:
Any utilities you arrange
for at your new home, such as cable or telephone, may come with an installation
fee.
- Interest adjustments.
- Renovation of new
home:
In order to “make it
their own,” many new homeowners like to paint or invest in other renovations
prior to or upon moving in to their new home. If this is your
plan, budget accordingly.
- Maintenance fees:
If you are moving to a
new condominium, you will likely be charged a monthly condo fee which
covers the costs of common area maintenance. |
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