So you've made a decision to buy your first home, and you've got your down payment all sorted out, but did you know there are many more costs to consider?
According to a recent TD Canada Trust First-Time Home Buyers Report, one of the biggest lessons learned by 60 per cent of new home buyers was that they should have been more thorough when budgeting and accounting for all of the costs of home ownership. This is why I always make sure to go over all closing costs when I meet my clients.
Generally you need to set aside 1.5 to 3 per cent of your home’s selling price in total closing costs, which can include:
- Appraisal fee
- Home inspection
- Tax: depending where you are, it’s called a Land Transfer Tax, Land or Deed Registration Fee, Tariff or Property Purchase Tax. This tax can take buyers by surprise because the amount can be substantial. Ask your mortgage broker for an estimate of what this can add up to in your situation.
- Legal fees
- Title insurance
- Utility hook ups
- Reimbursement of bills pre-paid by the previous owner, for instance property tax or utility bills
- Interest adjustment
- Moving costs
Even more often new home buyers forget the costs incurred once moving into a home!
When setting your budget, you also need to consider the ongoing costs that will become a part of your monthly home ownership expenses, which include:
- Home insurance
- Property taxes
- Utilities – gas/hydro/water
- Ongoing maintenance
Talk to me early so we can make sure you're completely ready to purchase your new home and start off on the right foot!