Jill Jordan
Mobile: 780-777-3434 Fax: 1-888-898-8705 Email Jill

The Costs of Buying a Home


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What is this home "really" going to cost me?  What does the broker mean by "closing costs"?  When purchasing a home there are many hidden costs a buyer does not know about.  A good mortgage broker should have taken some time to explain what they are, but incase they did not, here is a handy reference list.

Prepaid Taxes and/or Utility Bills. You will also have to reimburse the vendor on a prorated basis if some taxes and or utility bills have been prepaid beyond the closing date.   In addition, if you are purchasing a new home or a home that has been substaintally renovated you may have to pay GST.  

Property Taxes.  Very few things in life are certain, but paying taxes is surely one of them. It is not an exception when buying a home. First of all there is Property Tax, based on a percentage of the value of your home. You must continue to pay property taxes as long as you own the property, even after your mortgage is paid off. If you have a high-ratio mortgage, your lender may require that you have your property tax installments added to your mortgage payments.

Appraisal Fee. Your lender may require a property appraisal at your expense. A basic appraisal for mortgage purposes will usually cost between $150 and $250.

Real Property Report Fee. Your lender may require an up-to-date survey. The vendor usually provides one as a condition of your Offer to Purchase but there is the rare situation where the buyer may be required to do so.

Title Insurance. Many lawyers suggest buying title insurance which runs around $250 including taxes. This expense is paid n the lawyers office.

Property Insurance. This insurance covers the replacement value of the structure of your home and its contents. Your lender will insist on this because your home is the security for your mortgage.

Lawyer Fees. Even a straightforward home purchase requires a lawyer to review the Offer to Purchase, search the title, draw up mortgage documents and tend to the closing details. Lawyers fees for a purchase and/or mortgage transaction range widely depending on the complexity of the deal.

Mortgage Broker's Fee. A broker may charge a fee to find you a lender.

Moving Costs. Don't forget the costs for a professional moving company or a rental truck if you move yourself. For a comprehensive overview, including packing and storage.

Estoppel Certificate. A certificate that outlines a condominium corporation's financial and legal state. The certificate and supporting documents will cost you up to $100.

Condominium Fees. Condominium Corporations charge monthly fees for common-area maintenance, such as groundskeeping and carpet cleaning. Fees range widely depending on the type of structure but will probably be at least a few hundred dollars per month.

Home Inspection Fees. The best way to avoid unpleasant surprises is to arrange for a home inspection before you buy. A good home inspection is an objective, top-to-bottom examination of the home and everything that comes with it. Fees range widely, from about $350 to $450 for the average home.  If you are considering purchasing an acreage, there could be additional inspections for fresh water, sewer & septic and enviromental concerns.

Renovations and Repairs. If you buy a "fixer-upper", an inexpensive home in need of repairs, you will need a renovation fund. One general rule is that renovations always take longer than, and cost more than, you think. Also, the home inspection may indicate that the home needs major structural repairs such as a new roof.

Here's a handy worksheet you can print out and use to calculate your home closing costs: (Costs are approximate)

.
Details
When due
$ amount
. . .
Taxes
on closing
+/- 1/2 of the years taxes.
Utility Bills/Hookups
on closing
.
Appraisal Fee
on completion
Up to $600
RPR
on completion
Up to $500
Property Insurance
on closing
.
Lawyer Fees
on closing
$800 - $1000
Mortgage Broker's Fee
on closing
.
Moving Costs
after sale
.
Estoppel Certificate
on closing
Up to $500
Condominium Fees
on closing
.
Home Inspection Fees
on completion
$350 - $500
Renovations and Repairs
after sale
.
.
.
 
Total Costs
.
.