When buying a home there are plenty of other expenses that you won’t find on the home’s listing.
More than the mortgage and down payment there are upfront costs to consider and there are ongoing expenses. Here’s a brief rundown of the most common expenses:
Upfront, one-time costs:
- Home inspection. $350 to $600. It may be mandatory among some institutional lenders and the Canadian Mortgage and Housing Corporation recommends making one a condition of your Offer to Purchase.
- Appraisal fees. $300 to $500. It estimates of the value of the home. Get an independent appraisal done before you make an offer to ensure you’re not paying too much.
- Land survey. $1,000 to $2,000. Ask the seller to provide an updated survey, especially if there has been a new addition, deck or fence built close to the property line.
- Land transfer tax. From 0.5 to two per cent. In Ontario it’s a multi-tiered system: 0.5 per cent is paid on the first $55,000 and one per cent on the remaining.
- Harmonized Sales Tax. In Ontario it’s 13 per cent and is only paid on new homes. But it gets tacked on to lawyer’s fees, moving costs, home inspections and home staging.
- Title Insurance. $300. It protects you from any errors that may have been made in the public registry.
- Lawyers fee. $500 to $1,000 for the title search, deed, registration and mortgage papers.
- Utility reimbursements. If the previous owner paid for hydro, water and property taxes beyond the closing date, you’ll have to reimburse them.
- Moving costs. Whether you do it yourself or not, you’ll have to cover the cost of labour and/or the rental truck. $50-$60 per hour
Ongoing costs to factor into your monthly budget
- Property insurance. It begins on the day the sale of your house closes and starts at about $100-plus per month.
- Mortgage insurance. If you put down less than a 20 per cent deposit you will be required to pay for this type of insurance. Rates are charged at one per cent to 2.75 per cent of your total mortgage, according to the CMHC.
- Property taxes. Divide it by 12 to figure out your monthly payments. These are usually listed on the MLS ad.
A well-informed homebuyer is a less stressed one. Being financially prepared for moving day will hopefully minimiz