Planning to buy a home?
On top of the down payment that you have saved for you must make sure to plan for these additional costs:
1) Home Inspection ($400 - $700)
Prior to purchasing a home it is highly recommended that you hire a professional home inspector to determine
whether there are any defects that the previous homeowner either did not disclose or did not know about. Most
Realtors will make sure that the Buyers hire a home inspector, otherwise they will have their clients sign a legal
disclosure form where they state that they declined to do so, despite the Realtor's suggestion.
2) Lawyer or Notary Fees ($800 - $1700)
These are the fees pertaining to searching the land title, investigating the title, drafting all necessary documents,
registering the title in the land title office and for the HST on legal fees.
3) Property Taxes (varies)
If the annual property taxes have already been paid by the previous home owner, you will need to reimburse the
Seller based upon when you take possession of the home. For example, if the previous home owner paid $1000
for the year and you take possession in November, you will need to pay the Seller back for the months of
November & December.
4) Property Transfer Tax (1% on the first $200,000, and 2% of the balance)
For example, if the home sale price was $350,000 you will need to pay $5,000 in property transfer tax. First time
home buyers are exempt if purchase price is under $425,000, if you have never owned property before, and if the
home you are purchasing will be your primary residence.
5) HST or GST (12% before April 2013, 5% after April 2013)
This is the sales tax for new construction homes. If you are purchasing a re-sale home that has already been lived
in you DO NOT have to pay HST or GST. Certain rebates are available to eligible home buyers.
6) Other Possible Costs
If your lender requires a survey certificate or appraisal of the home for financing, this will also be at your cost. In
addition, if your down-payment is under 20% of the purchase price, you will need to pay a premium for mortgage
insurance, since you are considered a higher risk to the lender.
In conclusion, make sure to work closely with your Realtor and mortgage broker to ensure that you are fully
informed and aware of all the expenses to expect when buying a home.