24 Aug What are the costs associated with buying a home?
It’s no secret that it can be expensive to move home, and it’s not just the cost of the property itself that can cause a dent in your bank balance. To help you get a better understanding of everything you’ll be expected to pay for when you buy your first home, some of the main costs are listed below:
Down payment
While a lot will depend upon your specific circumstances, you’ll need to have at least a 5% down payment, and to qualify for a conventional mortgage, you’ll need 20% or more.
Deposit
This sum will count towards your down payment, and is the amount requested for by the seller to show your financial commitment to buying their property.
Home Inspection fee
While not everybody chooses to have a professional home inspection carried out before they buy a property, they are recommended, and can highlight any number of repair or maintenance issues that could affect the structure of the property, and which you might not otherwise have known about. A written report enables you to go over the findings in detail.
Mortgage default insurance (including provincial sales tax, PST)
If you’re putting down a deposit that’s less than 20%, you can pay the insurance premiums in one lump sum at the beginning, or have them factored into your mortgage payments.
Land transfer Tax (LTT)
This is calculated as a percentage of the price you’re paying for the property, and the amount can vary according to the province it’s in.
Legal fees, disbursements and title insurance
Typically obtained through your solicitor, or associated with them, at least, these costs may vary, and often quite significantly.
Other closing costs
Some of these may include property insurance, and tax or utility adjustments.
Moving costs
The majority of homebuyers hire the services of professional moving companies to help them pack up and shift their belongings, and while their prices can be competitive, they’re still an additional cost you’ll need to set funds aside for. You may also need to pay professional cleaners to clean your own home before sale, or your new property before you move in.
The best way to understand more about the various costs associated with buying a new home, is to talk to someone who knows the industry inside out, such as a mortgage advisor or broker. They’ll be able to talk you through every aspect of the mortgage process, and help you get the best deals for your money.