11 costs to consider when purchasing your home
Buying a home involves several costs that must be anticipated and integrated in order to properly define your budget.
Here are 11 costs to consider if you are thinking of buying a home.
1. Appraisal fee
Fee for determining the property lending value for mortgage purposes (this is not necessarily the same as the property's selling price).
2. Building inspection fee
Your home structures and systems are examined by an inspector who then provides you with a written report. Although not obligatory, building inspections are often one of the conditions on the Offer to Purchase.
3. Property survey
The survey indicates boundaries and measurements of the land and positions of major structures and any visible or registered easements (i.e. driveways) or encroachments (i.e. neighbour's fence) on the property. The survey is usually non-necessary.
4. Legal fees and related expenses
Ensure your notary's quote includes all related expenses, not just legal fees.
5. Mortgage Loan Insurance
If your downpayment is less than 20% of the property's purchase price, you will need to pay for the mortgage loan insurance plus applicable taxes, too. The mortgage loan insurance helps protect lenders against mortgage default.
6. Title insurance
This is optional and covers problems that may arise due to survey irregularities, power of sale issues, undischarged mortgages and other issues relating to the property's previous owners.
7. Prepaid property tax and utility adjustments
You must reimburse the vendor for any prepaid property taxes or utility bills.
8. Home insurance
Home insurance protects your home and its contents.
9. Mortgage life insurance
This is an optional insurance product. It protects your family's financial security by paying off all or a portion of your mortgage in the event of premature death of you or your spouse.
10. Sales tax
TPS/PST. Generally, GST is charged on new homes, but not on resale properties. Always ask before signing an Offer to Purchase.
11. Land transfer tax
Every Quebec municipality must collect duties on the transfer of any immovable situated within its territory. This tax is payable by the buyer.
Don't forget to consider general expenses such as moving and home decorating costs!!
We can give you many other tips. For more information about the first buying process, we invite you to visit Soon at Home here.
