A Checklist For First-Time Homebuyers To Prepare For Costs When Buying A Home
Most first-time homebuyers focus primarily on the features and cost of a new house. However, there are other fees, charges, and costs associated with homeownership that need to be considered. As a mortgage expert, I understand that it is easy to get carried away with the excitement of purchasing a new home and overlook vital costs.
While purchasing a new property can be a task in itself, it is critical to be aware of all the costs involved. As a professional mortgage broker in Cambridge, ON, I’ve created a handy checklist to help you list out your costs on time and with as little stress possible. Follow my checklist to prepare for costs when buying a home, so that you can get back to the other important things in life.
Most first-time homebuyers are already renting and are not used to utility costs such as sewer, water, gas, and electricity. There may also be set up fees or a deposit required for a new account. All of these expenses can have a heavy impact on your overall budget. Be sure not to get caught up in the excitement of a new place before factoring in these costs.
2. Lawyer fees
Lawyer or legal fees on a purchase can vary from firm-to-firm. These fees include, but are not limited to: title search, PIN search, mortgage paperwork, signing for documents, etc. If you are purchasing your first home, it’s wise to call around and get a quote on legal fees, so you are prepared on the closing day.
When it comes to applying for a mortgage, a lender will want to know exactly what the value of the property is. Once you put in an offer, you’re going to need to hire an appraiser to perform an inspection, which will be sent to your lender. An appraiser will conduct an indoor and outdoor room-by-room walkthrough to determine the overall condition. The cost of an appraisal is usually between $300-$500.
4. Property tax
Part of owning a home includes paying property and water tax. These payments can usually be determined before putting in an offer to purchase on the municipality’s website. Tax payments are due every year but can be paid by quarterly installments, one lump sum payment, or rolled into your monthly mortgage payments, depending on your lender. Tax rates can vary between regions and are worth keeping in mind.
5. Land transfer tax
When you purchase a home, you are also purchasing a piece of land, and the Land Transfer Tax must be paid. In Ontario, first-time homebuyers may be eligible for a rebate of up to $4000. Depending on the home you can afford to purchase, there may be Land Transfer Tax even after your rebate. How much Land Transfer Tax is paid depends on how much you’ve bought the property for.
6. Title insurance
Title Insurance provides homeowners with protection against title related losses, including fraud, survey errors, encroachment issues, identity theft, and undisclosed loans. The fee for a title insurance policy will cost you up to $250 but is a one-time purchase that you don’t want to ignore as the new legal owner.
7. Moving costs
Although moving style preferences can vary, moving will cost money. When preparing for the closing of your first home, be sure to include the cost of a rental truck and supplies or the cost to hire a moving company.
Furniture is a big part of purchasing your first home. Filling your new place with furniture can make a huge impact on your overall costs. Whether brand new or second hand, furniture is an essential component to factor into closing costs.
If you have any concerns about the cost of homeownership, purchasing a property, or obtaining a mortgage, reach out to Angela Milosevic. As a respected mortgage agent in Cambridge, ON, I have been providing clients with the highest standard of services for over twelve years. My mortgage services include first time home buyer mortgage, mortgage refinance for debt consolidation, mortgage refinances for home renovation or investment, self-employed mortgage, investment property mortgage, vacation or second home properties, bad credit mortgage, commercial mortgage, reverse mortgage, New to Canada mortgage, and spousal buyout mortgage.