Ed Massa

Don’t forget about these costs when buying a home

Buying a home is a milestone, whether it is your first, third or fourth. In addition to the price of a home, there are some other costs you’ll incur. Some of these costs are one-time fixed payments, while others represent an ongoing monthly or yearly commitment. Not all costs apply to every sale or purchase. However, when you are aware of the following items you won’t be hit with any surprises on closing day.

Inspection fee
An inspection performed by a professional inspector is a sound investment. For $300 - $500, you’ll receive a written report on areas that are structurally sound and those where repairs are required.

Appraisal fee
When you apply for a mortgage, your lending institution will ask for an appraisal of the property. Budget approximately $300 -$ 500.

Survey fee
When you purchase a resale home, you are also required to complete a Real Property Report, which assess any changes to the home and property. Budget around $400 - $600 (Rural fees vary depending on size of land being surveyed).

Property insurance
Insurance on your home covers the replacement value (structure and contents). To protect their investment on their loan, financial institutions require this coverage. Allow for $500 - $1,000.

Service charges
There will be an installation fee for utility services, including telephone, water, electricity, gas, and cable. Hook up fees range from $50.00 - $175.00 depending upon the service.

Legal fees
A lawyer should review every real estate transaction. Fees are determined by the complexity of the issues involved. Shop around and ask for an estimate prior to hiring any lawyer.

Mortgage loan insurance fee
Depending upon the down payment (can be payed infull upfront or into your monthly mortgage payment), some lending institutions require mortgage loan insurance. Budget between 0.5% - 2.75% of the total amount of the mortgage.

Mortgage application fee
Some financial institutions charge a mortgage application fee to process your application. If your request for a mortgage is turned down, most will return the application fee to you. Each year you renew a mortgage some institutions also charge a fee.

Moving costs
Costs for professional movers range from $65.00 - $100/hour for a van and two movers. Prices may be higher during peak moving times.

Local improvements
In some cases, the cost of local improvements made in your area (sewers, sidewalks, alleys) could be added to your tax bill.

Closing costs
With the purchase price of a resale home, the closing is always “subject to usual adjustments.”
This means that any amount that the seller has already prepaid will be adjusted so that the home buyer pays the excess amount back to the seller and vice versa. These adjustments can include:
municipal property and school taxes monthly condominium maintenance fees first and last month's rental for rental properties that may be in the home, utilities (such as hydro, water and fuel oil, including GST).

Interest adjustment costs
Most lenders expect the first mortgage payment one month after closing the purchase - however, if you close mid-month, some lenders expect the first payment at the beginning of the next month, two weeks before you would normally expect. Or they charge a pro-rated interest to make up the difference.

Land transfer tax
Most provinces levy a one-time tax based on a percentage of the purchase price of the property.