Other Costs that Come with Buying a Home
Let's take a look at many of the other costs that come with buying a home.
The Down Payment
In Canada we need a minimum of 5% down payment - although this is NOT exclusive to only First Time Home Buyers, recent federal mortgage changes have made it possible to effectively own only (1) ONE of these insured mortgages at any one time.
Any mortgage with less than 20% down payment will be insured by CMHC, or Genworth Canada, or Canada Guarantee.
Other Set-Up Costs ( over and above your Downpayment)
- Mortgage Insurance: For any Purchase with less than 20% down payment, you will be paying a Mortgage Insurance Premium. Good news is this is added to your mortgage so you dont have to pay for it out of pocket.
- Home Inspections - budget $400.00 - $500.00 for this.
- Lawyer : Budget $1200.00 - $1500.00 for this
- Condo Docs Review: If you by a condo, you might want to have a pro review the docs. If so budget $400.00 for this.
- Realtor Fees: There is ZERO cost to you when you hire my services. The Seller pays all Realtor Commissions.
Ongoing Payments
Your down payment will tell you how large a mortgage you have. Once you have that number, it’s time to figure out how much your monthly payments will be. You can shop the internet to get a sense of the current rate and then plug that number into a mortgage calculator to estimate what your monthly payments might be.
Other Costs
When you move into a new home, you may want to do landscaping, remodeling or purchase new furniture. Carefully consider the costs of these expenses and make an objective measurement of what they will cost and when you plan on spending this money. You’ll have to deal with property tax, insurance and maintenance. As a good rule of thumb, I suggest you budget two months extra mortgage payments for annual upkeep. This is for unforeseen fixes and it’s on top of utilities, gardening, etc.
Now that you have your numbers, it’s time to put this all together to see if you can really afford your home or not.
With Gratitude,
Your Realtor Denis Hrstic