Buying a home involves more than just the purchase price. There are additional costs that buyers need to consider and budget for. These costs can vary depending on the location and specific circumstances. Here are 10 extra costs that you should be aware of before buying a home:
- Appraisal Fee: Your lending institution may require an appraisal of the property, and you would be responsible for paying the fee, which can range from $400 to $500.
- Property Taxes: Depending on your down payment, your lender may include property taxes in your monthly mortgage payments. If not, you’ll need to provide annual proof of tax payment.
- Property Insurance: You’ll need to obtain home insurance to cover the replacement value of your home and its contents. Your lender will require proof of insurance.
- Service Charges: Installing new utilities such as telephone or cable may involve an installation fee.
- Legal Fees: It’s advisable to involve a lawyer in the home purchase process to review all paperwork. Legal fees can vary based on complexity and the lawyer’s experience.
- Mortgage Loan Insurance Fee: If your equity is below a certain threshold, you may be required to have mortgage loan insurance, which can cost between 0.5% and 7.0% of the total mortgage amount.
- Mortgage Broker’s Fee: If you use a mortgage broker to find a lender and arrange financing, they may charge a fee. However, it’s worth shopping around as some brokers offer their services without charging the buyer.
- Moving Costs: Hiring professional movers can range from $50 to $100 per hour for a van and two movers, with higher rates during peak seasons.
- Maintenance Fees: If you’re buying a condo, there will be monthly maintenance fees for common area upkeep. The costs vary depending on the building.
- Land Transfer Tax: Whenever a property changes hands, a land transfer tax is applied, the amount of which can vary.
Being aware of these additional costs will help you budget properly and avoid any financial surprises on closing day. It’s important to consider these expenses as part of the overall affordability of the home you’re purchasing.