• Costs to keep in mind before buying a home.

If you feel like you're ready to buy a house, one of the firsts questions you're likely to ask yourself is: "How much can I afford?" Answering that question means taking a look at several factors. It's essential to understand and anticipate the expenses needed to buy a home, in addition to the price you're paying for the property.

I would love to give you a breakdown of closing costs that you may encounter... so you can plan ahead of time. Some of these expenses will be required, while some others may be waived off. That will be according to the requirements of your mortgage lender and the size of your loan. Buying a home has additional costs that you need to keep in mind. A good rule of thumb is to calculate 2-4% of the final home sale price.

Mandatory closing costs:

  • Adjustment costs | $ varies | property taxes and utilities paid off by seller after the buyer takes possession.
  • Legal fees⁠ | $1,000 - $1,500
  • Disbursements | ± $100 | miscellaneous fees: mailing, land transfer fees, bank charges, photocopies.
  • Property transfer tax (PTT) | $ depends on the sale price | 1% : first <200k ... 2%: portion >200k and <2M ... 3%: portion >2M and <3M ... +2%: portion >3M

Likely mandatory closing costs: 

  • Mortgage default insurance | mandatory when -20% downpayment.
  • Land survey and building location certificate (BLC) | lenders may require this and sellers may have it and they can provide for you.
  • Estoppel | ± $35 | required if buying a strata property.
  • Goods and services tax (GST) | 5% of the sale price, but may be eligible for a partial rebate | mandatory if you’re buying a newly built home.
  • Property appraisal | $350 - $500 | lender may require it to ensure property value.
  • Title insurance | ± $300 | lenders may require this to cover against defects in the title; like existing liens, lines of credit, other mortgages, etc.
  • Mortgage prepayment penalty | depends on your mortgage, if you have an existing one.

 NOT mandatory closing costs:

  • Home inspection | $350 - $750 | recommended for ensuring that you are aware of the home's true condition and can afford repairs. 
  • Moving costs | $ varies | moving services you hire, truck rental fees, moving equipment and incidental costs.

 After purchase...

  • Home insurance | 800-1,200 annual | likely mandatory by lenders to cover any loss or damage to your home.
  • Switching or setting up utilities | $ depends | may be different changes according to service (gas, electricity, phone, security system, etc.)
  • Maintenance | $ depends
  • Energy costs | $ varies
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