Costs Associated with Buying
Over the years you have dillegently saved your money and have a downpayment ready. You've made the decision to embark on a home buying journey. You have reached out to a mortgage specialist to discuss a preapproval and you have chosen your real estate agent.
What else should you be preparing for during the process?
Well I am glad you asked. As a responsible purchaser, you should be familiar with the costs listed below. It would be important that you reach out to the professionals, receive quotes and properly build out your budget.
- Mortgage Insurance: If you buy a home with a small down payment, a lender usually requires that you pay a fee for mortgage insurance. This fee protects the lender against loss due to foreclosure. This can be paid in a lump sum or amortized with your mortgage payments.
- Appraisal Fee: Some lenders or mortgage insurers will ask for an appraisal during the finalization of your mortgage application.
- Inspection: Although inspections are not mandatory, it is reccommended that you have one. Depending on the complexity and size of the property the cost of this can vary. Also if you add on any additional inspections such as sewer scopes, WETT, etc. each inspection will be an additional cost.
- Condominium Document Review: If you are purchasing a condominium, having the corporations documents review is imparative. Much like the inspection the cost for this can vary but in this case more so between service providers.
- Title Insurance Fees: If you are choosing to purchase this, it is a one time fee with your lawyer. Some lenders will require you to purchase title insurance, it would be prudent to prepare for it regardless.
- Home Insurance: This is required before the bank transferring funds. The cost can vary household to household. If you are purchasing an older home or a rural property it is important to connect with your insurance provider during the pending period to make sure all the home items are insurable.
- Utilities: Depending on whether or not you are transferring your services or setting them up for the first time there may be initializing costs.
- Moving: The cost of moving varies. If you are hiring movers or if you are just renting a Uhaul. It is important to consider the costs associated.
- Legal fees, title transfer and tax adjustment: Lawyers charge for time and disbursements for the process of transferring the title from the seller's name into the new home owner's name. On top of this, the annual property tax amount will be adjusted and paid as well.
Make sure you consult a real estate professional in your area to find out which fees--and how much--you will be expected to pay during the closing of your prospective home.
