DreamHomeBuying

What does it cost to buy a home? Beside the cost of the home and lawyers fee you need to be prepared with closing costs and other costs that could mean extra thousands of dollars.

Deposit
The deposit is required when you actually make an offer to purchase the home to show the seller that you are serious about buying his home. This will be part of your down payment. The deposit amount will vary with the cost of the home but could be 5 to 10 percent. If you back out of the deal without having purchasing conditions, like financing, home inspection, insurance and such, you could lose your deposit or even be sued for damages. Your agent can better advise you on this.

Mortgage Loan Insurance Premium
If your deposit is less than 20% then you are considered to have a high-ratio mortgage which means that your lender will need mortgage loan insurance. Mortgage loan insurance protects the lender. You could if you qualify invest in a term life insurance for the length of the mortgage to protect yourself. The difference here is that if you or your spouse passed away the Mortgage loan insurance would go directly to pay the lender but the term insurance would go to you and you could decide what the money goes toward. Depending on your financial situation of course this might be a better option especially if you have enough income to maintain the mortgage payment on a monthly basis rather than see the mortgage paid off. You should check your options and not necessarily take the pressure of the lending institution.

Home Inspection Fee
Home inspection is normally part of the purchasing agreement as a condition of purchase. We highly recommend to all of our clients to get a home inspection done by a qualified inspector. They will not only provide you with the condition of the home but many will also include some kind of manual or reports that will help you maintain your home in the future. Cost will vary depending on the age of the home, its size, its condition.

Prepaid Property Taxes and/or Utility Bills
The seller may have already paid property taxes or other expenses that apply to the time after the sale has closed. You might need to pay back taxes or utilities to the seller.

Legal Fees
The legal fees must be paid on closing day and will include charges to check on the legal status of the property.

Property Insurance
The mortgage lender will require that you have property insurance in the same way you have car insurance which protects you if your home and its content needed to be replaced after a fire for example. Property insurance must be in place on closing day.

Survey or Certificate of Location Cost
If a survey is more than five years old, the mortgage lender may request for an up-to-date survey or certificate of location. You can request this from the seller or if he is unwilling to obtain one you might have to pay for it yourself to get it done. A survey or certificate of location can cost $1,000 to $2,000.

Appraisal Fee
An appraisal is an estimate of the value of the home. This could be requested by your mortgage lender as part of the mortgage loan approval. Your Realtor can help you find an independent appraiser.

Title Insurance
Your lender or lawyer may suggest that you get title insurance which will cover loss caused by defects of title to the property.

Land Registration Fees
Sometimes called Land Transfer Tax, Deed Registration Fee, Tariff or Property Purchases Tax. These may have to be paid to the municipality or province at closing. The cost is a percentage of the property’s purchase price. Your Realtor will be able to let you know if such fees apply to the home you are buying as these can equate few thousand dollars.

Water Tests and Septic Tank
If the home you are purchasing has a well or septic tank you will want to get the water tested for quality and to ensure adequate water supply and that the septic system is in good working order.

Estopel Certificate Fee
If you are buying a condominium you will want to obtain a Status Certificate or Estopel Certificate which is about $100. The certificate outlines a condominium corporation’s financial and legal status.

Other Costs
Beside the above you will want to consider moving costs, renovations or repairs, condominium fees, service connections such as phone, cable, and internet. You might also need to purchase appliances, gardening or snow removal equipment, hand tools, decorating materials such as curtains, paint or wallpaper.
It might all seem like a lot right now but until you investigate whether or not you can become a home owner it’s all in vain. Give me a call to find out what you need to do to become a homeowner and to get your dream of home ownership that much closer to reality.

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