Buying a dream home is a huge investment, one that has a lot of extra costs that home buyers may have not considered. There is always the obvious cost - the list and/or sale price of the home you buy. But there are numerous other costs associated with buying a home, both one-time costs and ongoing costs.
Here is a list of most commonly costs that home buyers forget to include in their budgets:
A home inspection is important to help you see what items in the home will need to be replaced in 1,3,5 years and beyond. It can also uncover issues that are deal breakers - saving you tens of thousands of dollars.
These costs are over and above your principal and interest payments and may include appraisal costs, mortgage insurance, or other affiliated expenses. And don't forget CMHC insurance, which could add 4% onto your mortgage!
You home will be taxed by the city based on its assessed value. You can combine your taxes into your mortgage payment or make an annual payment directly to the city. The choice is yours.
You must have a real estate lawyer help make the legal end of your purchase smooth for you. This includes coordinating payment with your bank, preparing and submitting ownership documents, and making sure that the home is legally placed in your name with provincial registries.
Home Renovation Costs
This can cover anything from a coat of paint to a complete design overhaul. Your costs associated with this can vary quite a bit, depending on the age of the home, your tastes, and your connections with contractors.
Different from a home reno cost, the replacement costs cover mostly mechanical parts of the home that protects the home - such as hot water tank, furnace, roof, windows and eavestroughs. The older your dream home is, the more you may have to budget for these replacements.
Condo Fees/ HOA Fees
If you in a condominium complex, you will pay condo fees to cover some or all of the following services: insurance, exterior maintenance, utility costs, common area maintenance, lawn and snow removal services, and recreation facilities. You may also be in a neighborhood that charges an HOA fee that covers common area maintenance.
Home Insurance and Security
Home insurance for fire, theft, and other unforeseen issues is a wise decision for a home owner to invest in. Depending on the type of home you buy, you may also want to consider a security system to protect your family and your items.
Yard, Landscaping, Snow Removal, and Lawn Care Costs
That lawn isn't going to cut itself, and the snow isn't going to shovel itself! Whether you pay a company to come and do it for you, or need to purchase equipment to do it yourself, you
Buying a home is not as simple as your down payment and mortgage payments. The types of extra costs will depend on the age and type of property you purchase. Make sure that you know about these extra home buying costs before you buy so that there are no budget surprises after you buy!