Everything is going as planned. You finally found the home of your dreams, you were approved for your mortgage and you are excited about moving into your new house. But wait, don't start celebrating just yet. Did you know that many Canadian buyers forget account for the closing costs of their new home?
This is the amount of money that you will need to come up with prior to moving into your dream house. Often people forget about this fee because it is not included in the price of the home. This is because many people are so excited and overwhelmed with the stress associated with buying a home that it slips their mind.
So just how much money will you need to come up with before stepping foot inside your house as a proud homeowner? From a general perspective you can expect to pay between 1.5% and 4% of the total price of the home.
When you have a high-ratio mortgage, which means having less than 20% of a down payment on your mortgage, a mortgage loan insurance premium can be expensive. This is because this expense is often added to the cost of your monthly mortgage.
Another expense you will want to take into consideration is an appraisal fee. Often lenders want to have the property value of your home assessed. This is done in order to verify that the money loaned corresponds with the price of the home. Appraisal fees can differ depending on the location and the type of property it is.
Insurance is another important necessity when you purchase a new home. It is imperative that you have insurance prior to legally taking possession of your home. It would be best to shop around for insurance early on so you can find the best price possible.
A home inspection is also a very important task that needs to be performed and gives you peace of mind knowing that the house you purchased is in good working condition. A home inspection checks important factors like electrical, plumbing, heating, foundation stability, among many others.
Another fee you may have to end up paying is Land Registration Fees. Whether or not you have to pay this fee depends on the province or territory in which you purchase your home. The cost is generally calculated by the purchase price of the property.
Water is essential for everyday living; therefore it would be in your best interest to have a vendor check the quality of the water. You can work with the vendor and list the negotiated cost in your offer to purchase.
Other factors you will want to take into consideration when buying your home is the cost for utility hook-ups. It would be wise to put aside a few hundred dollars for this cost just in case this service is needed.
Since buying a home can be a very overwhelming experience hiring a lawyer or a mortgage broker is a wise decision. It can be very easy to forget about certain steps in the home buying process, since there are so many of them.
The lawyer can offer advice into what steps will need to be done in order for the home buying transaction to progress smoothly. They can also let you know of the required documents needed on the legal end of things.
The mortgage broker knows the entire process of mortgages. They can let you know the progress on the loan as well as documents needed in order for the mortgage to go through. This can help you to feel more at ease because you know someone is there helping you with this transaction. They can also answer the many questions you may have during the loan process.