SmartHomeOwners

Congratulations! You’ve just bought a new home; a place to call your own. It’s exciting that’s for sure. But before you can sit back and relax there are a few remaining costs to contend with. Make sure you’ve budgeted accordingly.

Legal Fees:

You will require a lawyer to help you through the legal processes of the title transfer etc., the cost for this can vary greatly from lawyer to lawyer. Oftentimes a real estate salesperson or mortgage broker can recommend a lawyer whom might be able to offer a deal or discounts.

CMHC Insurance:

If you happen to purchase a house with less than a 20% down-payment, you will be required to pay a premium to insure the mortgage. More often than not, the option of adding it into your total mortgage is the most popular option. This way, it will not be a part of your closing costs and the amount is made easier to pay as it is spread out through your mortgage payments instead of a one time lump sum.

Home Insurance:

Home insurance is something you will need to protect your newly acquired asset. Different insurance companies will have varying rates depending on the coverage you would like for your home. On the other hand, when buying a condominium unit, the insurance for the building is included in your maintenance fees and will not show up as a part of the closing costs.

Land Transfer Tax:

This must be paid on all real estate purchases. The more expensive your home is, the larger the tax will be. In Ontario it is calculated via this formula:

Up to $55,000 * 0.5 % of total property value
From $55,000 to $250,000 * 1 % of total property value
From $250,000 to $400,000 * 1.5 % of total property value
From $400,000 up * 2 % of total property value

The total cost from each segment is added which results in your final land transfer tax cost.

Moving Costs:

Lastly, keep in mind that moving your life from one location to the other will be an arduous task. If you feel that it will be too much for you and your friends to manage, consider hiring a moving company. It will put a dent in your wallet, but it will bring much more comfort and relaxation throughout the closing process.

A brand new start to your life is extremely exciting; but at the same time, being bogged down by unexpected and unaccounted for costs will ruin your blissful moment. Make sure to keep these costs in mind before deciding on your new home!