Buying a home is the largest purchase you’ll likely make.
But the cost doesn’t end there.
1. Mortgage Payments
Know your payment possibilities for the various amortization periods, terms and payment options.
Be prepared for an interest adjustment charge which is the amount of interest accrued between your closing day and the first day your mortgage payment comes out.
2. Home Inspection
A home inspection will help you identify any major issues with a house before you buy it. Your Realtor will typically makes this one of the conditions of purchase.
3. Mortgage Insurance
Mortgage insurance is mandatory with 5% down and usually required with 20% or less. Typically the insurance premium is added to the principal borrowed and will increase your payments. Check out CMHC’s table of premiums.
4. Title Insurance
You will be charged for this lender policy as part of your closing costs and it typically costs about $250. Title insurance protects you against things such as fraud, survey errors, encroachment issues, existing undisclosed liens, as well as any other issues that prevent you from having clear ownership of your property.
5. Property Appraisal
This may be required by your lender to determine how much they are prepared to lend to you. Remember the amount isn’t the same as the purchase price so don’t be surprised if the figure is less than you expect. Some lenders will include this as part of the mortgage package.
6. Home Insurance
This is often overlooked when calculating monthly payments. Be sure to get at least 2 estimates and make sure you inquire about the need for separate riders for jewelery, high performance bicycles, art, antiques, etc.
7. Land Transfer Tax
The tax is based on the home’s purchase price. Most provinces charge provincial land tax, but some cities charge their own municipal land transfer tax, too. Taxes vary by province and first-time home buyers often qualify for a rebate for part of the cost.
8. Closing Costs
The seller may have prepaid property taxes, utility bills or condo fees before you take ownership of the property. You reimburse the seller for the portion of the costs from the closing date forward.
Legal Costs and Disbursements
Legal costs vary, so it’s a good idea to ask your lawyer for an estimate beforehand. Disbursements are expenses incurred by your lawyer on your behalf and can include court fees, courier charges and photocopying costs.
9. Moving Day
Unless you have friends who adore you and own trucks, get a least two estimates from moving companies.