It is essential that you are aware of the costs associated with a Kamloops home purchase. It is important to speak with a mortgage professional before shopping for a home; this will allow you to shop within a price range that is realistic for your situation. At the same time, make sure you are prepared financially for the standard costs associated with a purchase of real estate.
Some of these costs may include:
Deposit: Once you have an accepted offer on a place, there is generally a five to ten business day period to remove subjects (ie. Inspection, financing, etc.) Once those subjects have been satisfied, you are required to put down a deposit on the property. This amount varies, so make sure to ask your Realtor.
Property Purchase Tax: If you are a first time home buyer and you meet the qualifications, this does not apply to you. However, if you have ever owned property, anywhere in the world, this tax will be charged on your purchase completion date. You calculate the amount by taking 1% of the first $200,000 and then 2% of anything over that.
GST: When purchasing a brand new property, GST will be charged. Your realtor will advise you of this amount, and it does not apply to used homes.
Closing/Legal Fees: Be prepared for a legal bill of approximately $1000 for a standard purchase or sale. If you are buying and selling at the same time, budget approximately $2000 for this expense.
Property Tax Adjustment: This is calculated at the lawyers office. A person is always responsible for the property taxes due during the time lived in the home.
Appraisal: Depending on the lender and how much money you have down, an appraisal of the property may be required. A standard, residential appraisal will run between $250-$350, and is due at the time of appraisal. Different properties will have a higher cost, so ask your mortgage professional once you have decided on a property.
Insurance Premium (If Applicable): In Canada, if you are financing a property to more than 80% of the property value, the mortgage needs to be insured (This is called a “high ratio” mortgage). This is generally done through CMHC, Genworth Financial, or AIG. They charge an insurance premium that is added to your total mortgage. The percentage that you pay will vary depending on how much money you have down and how straight forward the approval is. If you have a 20% down payment or you are refinancing to no more than 80% of the property value, a fee is generally not charged. A typical fee ranges from 1.75% to 3.10% of the mortgage amount.
It is essential to get pre-approved before making a commitment to purchase a home in Kamloops. If you have any questions for me about mortgages don’t hesitate to post a comment here or contact me directly.