You’ve got your downpayment, you’re pre-approved for your mortgage and you have your deposit ready to secure the home of your dreams.
You’re all set, right?
After four decades in the financial services field, including 15 years as a successful mortgage broker, Vernon’s Dawn Stephanishin knows that unexpected home purchase expenses can catch home buyers by surprise.
“Over my many years as a mortgage broker, I know there are some expenses during the home buying process that are often overlooked,” says Stephanishin, with Invis, Canada’s Mortgage Experts. “It’s important that we review the estimates together to ensure that on moving day you don’t receive a request for an unexpected payment.”
With any home purchase, buyers can expect some standard expenses, such as legal fees, home inspections, house insurance, title insurance and real estate transfer taxes. These expenses are in addition to the downpayment funds you need for your mortgage to be processed, so be sure to set aside 1 ½ to 4 per cent of the cost of the home to cover the buying costs, Stephanishin recommends.
For example, for a home valued in the $400,000 range, the costs would be $6,000 to $12,000, depending on whether or not you are a first-time home buyer:
- Land Transfer Tax, for a standard repeat buyer – $6,000
- Legal fees, including land title registration, title insurance, legal fees and mortgage set-up fees – $1,200
- Adjustments for property taxes – $1,000 to 3,000
- House insurance – $1,200
- Home inspection – $500; septic and well inspection would add more
- Property appraisal – $350 to 500.
Expenses that are often forgotten:
In the excitement of buying a new home, whether it’s your first or your first in awhile, purchasers can forget some of the myriad associated costs, Stephanishin says. For example:
- Moving costs, including utilities and service hook-up or cancellation fees and changing door locks
- Any immediate repairs required
- New household goods needed, such as a lawnmower, garden tools or snow removal equipment
- Redecorating or renovation work. “If your furnace or hot water tank expires, you might suddenly need several thousand dollars just to have heat and water,” Stephanishin says.
Ongoing costs of owning a home:
Beyond your mortgage payments and utility costs, a variety of additional ongoing costs come with owning a home. Annual house insurance, property taxes, water fees, plus ongoing maintenance costs should all be factored into your budget.
Dawn Stephanishin is an award-winning mortgage broker working in the Vernon area to help you realize your real esate goals. Learn more at dawnstephanishin.com
**All examples are estimates of costs at this time