Buying a Home is a huge decision and it is not one that people recommend jumping into too quickly.  this is because there are many things to consider when buying a home.  You want to make sure your kids grow up in a safe and peaceful neighborhood-close to a school.  You also look to ensure an easier commute to work, respectable neighbors and a house that feels like home-with the perfect deck, or kitchen or living room for your family. Similarly, there are numerous costs to consider as well.  Listed here are ten costs that can be significant chunk of change, yet sometimes go overlooked with planning a move.  A good realtor (Emma or Ray) would be happy to explain these costs and make sure that you are fully prepared for the home buying process before you go on an open house tour.
Here there are:

1. Mortgage Insurance :  some mortgages are classified as high-ratio mortgages.  this means that the bank is taking a substantial higher portion of the risk than the homeowner is.  With this being said, if you buy a house with less than the 20% down (high ratio) then the government requires that your mortgage be insured against default.  This can range from 0.5% - 2.9% of the mortgage amount annually-meaning that it could coast between $60 and $175 a month.

2. Legal Fees:  A lawyer is an important part of the home buying process - they make sure that the contract is in good order so the neither party is left with an unfair deal.  This could cost up to $2000 or more depending on Purchase price.

3. Land Transfer Tax:  This is a tax on land transfers that is specific to each province.  In Ontario .05% is charged to the first $55,00, 1% on anything between that and $250,000, and1.5% up to $400,000.

4.  Home Inspection:  Home inspection is a critical step to take before signing an agreement.  A professional home will be to look for flaws in everything from foundations to the plumbing; from the roof to the electrical.  Prices vary, but the approximate cost on the average sized home is about $500 - a small price to pay for peace of mind.

5. Fire Insurance:  Not only will fire insurance allow for the replacement of items and property in the event of a fire, but many mortgages require it to over the amount of the mortgage/value of the building.  these cost can vary, depending on the size of your home and the value of your property and assets.  Make sure to shop around and compare prices before signing a policy.

6. Appraisal Fee:  An official appraisal is another thing that many mortgage lenders will require of their clients.  This is an official assessment of the value of a home.  It will also be beneficial for the buyer to know exactly what the house is worth-especially during the negotiations of the sale price.  An appraisal will cost about $300.  Sometimes a lender will pay for this in order to get your business.

7.  Survey:  A survey will ensure that you are buying the ownership of the property that you think you are.  You do not want to sign an agreement and find out that your lot is smaller than you thought.  some lenders will also require an official survey.  This will cost ???

8.  Prepaid Property Tax or Utility Bills:  If you buy a house in the middle of a month, a seller could ask you to reimburse them for prepaid property tax or utilities.  It is not very common, but be prepared none the less.

9.  Maintenance:  Maintaining a house is expensive.  Personal finance experts recommend that a family set aside 3% to 4% of a homes value each year for maintenance costs.  You never know when you will need to replace windows, fix up the roof or replace a broken hot water tank.

10.  Move-In/Decoration costs:  Finally, there can be a lot of unforeseen move-in and decorating costs that should be taken into account before buying.  An end table here, and a coat of paint there, can really add up.  Know exactly how many chairs, garbage cans, area rugs, and plumbing fixtures you will need to purchase before you buy a house and start moving.

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Emma Kearns

Emma Kearns

Broker of Record
CENTURY 21 All Seasons Realty Ltd., Brokerage*
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