There are a few costs to buying a new home. I would love to break them down for you. Let's jump into it together. As always I welcome your questions.
If you’re looking to buy your first house or your next house, it’s a good idea to plan ahead and consider all the costs associated with buying. I always say to my clients you would never go to the grocery store without knowing what you have to spend on food. So, it makes sense to take the time to really understand the costs associated with purchasing a home.
Your closing costs represent the things you will have to pay for out of your pocket, and the amount of money necessary to finalize the purchase of your new property. If you are anything like me, you don’t like to be surprised when it comes to paying for things.
The best time to work through the costs associated with closing your mortgage is before you even start looking for a place to buy. Closing costs should be part of the pre-approval conversation; they are just as important as saving for your down payment. In addition, many lenders require you to show your closing costs in a bank account for 90 days. Not each file and purchase will be the same. You may not have ALL of these costs however this list will be a great resource for you to consider when buying your next home.
Here is a list of the things that could cost you money when purchasing a home:
Home Inspection or Appraisal
A home inspection is when you hire a professional to assess the condition of the property to make sure that you won’t be surprised by unexpected issues.
An appraisal is when you hire a professional to compare the value of the property against other properties that have recently sold in the area.
The cost of a home inspection and the appraisal is your fee. However, there are circumstances where a client purchase might not require an appraisal. The inspection, although highly recommended, is sometimes waived as a condition of the purchase in order for a client to negotiate the sale. Please inquire with your trusted real estate professional to see what makes the most sense for you and your next home purchase.
Lawyer or Notary Fees
To handle all the legal paperwork, you will be required to hire a real estate lawyer. Chances are, this will be one of your most significant expenses. If you need a recommendation for a great lawyer, please ask me. The relationship between the mortgage broker and the lawyer is critical after all we give the lawyer the money for your closing.
Depending on which province you live in, and the purchase price of the property you are buying, you might have to pay a property transfer tax or land transfer tax. If you are buying in Toronto, you will have two land transfer taxes, one for the province of Ontario and one for the city of Toronto. I am happy to go over these costs with you. They vary depending on the price you are paying for your home.
Before any financial institution lends you money, they will want to see that you already have property/home insurance in place for the purchase.
Unlike property insurance, which is mandatory, you might also consider mortgage insurance, life insurance, or a disability insurance policy that protects you in case of unforeseen events. I highly recommend having a life insurance conversation when buying a home. If you would like to be introduced to an insurance broker please let me know and I will connect you to the best.
Congratulations, you have a home, now you have to get all your stuff there! Don’t underestimate the cost of moving your stuff. I know for me personally outsourcing this is key. I like to have help packing, lifting, moving and cleaning. Broom swept is often the condition of purchase. A deep clean is a nice thing to have done so you know the home you are moving into is spick and span.
Hooking up new services to a property is more time-consuming than costly. However, if you’re moving to a new province or don’t have a history of paying utilities, you might be required to come up with a deposit for services.
So, there you have it, most of the costs are associated with buying a new property. However, this list is by no means exhaustive, so if you have any questions about your closing costs, or anything else mortgage-related, contact me anytime, I’d love to hear from you!
If you can think of other costs you experienced I would love to share them with my clients. Don't forget to include pizza and beer! You gotta eat in that new place you call home.
Www.emilycallme.com if you would like to book with me today to discuss your next big move.