If you’re looking to buy your first house—or your next house—it’s a good idea to plan ahead and consider all the costs associated with buying.
Your closing costs represent the things you’ll pay for out of your pocket, as well as the amount of money necessary to finalize the purchase of your new property.
The best time to work through the costs associated with closing your mortgage is before you even start looking for a place to buy. Closing costs should be part of the pre-approval conversation; they’re just as important as saving for your downpayment.
Here are 6 things that’ll cost you money:
1. Home inspection or appraisal
A home inspection is when a professional assesses the condition of the property to make sure that there won’t be any unexpected issues.
An appraisal is when a professional compares the value of the property against other properties that have recently sold in the area.
The cost of a home inspection is yours. The cost of the appraisal, on the other hand, may be covered by high-ratio insurance, or sometimes it’s your responsibility, depending on your specific circumstances.
2. Lawyer/notary fees
To handle all the legal paperwork, you must hire a real estate lawyer. This may be one of your most significant expenses.
Depending on which province you live in and the purchase price of the property you are buying, you may have to pay a property transfer tax or land transfer tax.
Before any financial institution lends you money, they’ll want to see that you already have property/home insurance in place for the purchase.
Unlike property insurance, which is mandatory, you might also consider mortgage insurance, life insurance, or a disability insurance policy that protects you in case of unforeseen events. It’s not necessary, but it’s worth at least a conversation.
5. Moving expenses
Congratulations, you have a home. Now you have to get all your stuff there! Don’t underestimate the cost of moving your stuff.
Hooking up new services to a property is more time consuming than costly. However, if you’re moving to a new province or don’t have a history of paying utilities, you might be required to come up with a deposit for services.
So there you have it. This most of the costs associated with buying a new property. However, this list is by no means exhaustive, so if you have any questions about your closing costs, or anything else mortgage-related, contact us anytime. We’d love to hear from you!