Buying a home? Have you thought of the purchasing costs?

Guest blogger, Kyle Green has some great tips on making sure you have thought about and planned for the purchasing costs of your next home purchase.  Enjoy the read, we sure did!

It is important when you decide to buy a home that you have a full understanding of the costs associated with your purchase. Often people assume the only cost of buying a home in our real estate market is the price of the home.

There are a lot of additional costs that you must be prepared for when buying a home and it is important that you are fully aware of them. You will need to have some additional money set aside to cover these costs unless you have already made arrangements to absorb these costs into your mortgage, such as a cashback mortgage available through Mortgage Alliance.

Your largest initial expense will be your deposit. As a first time buyer (or even a repeat buyer) this should generally be approximately 5% of the purchase price, however, it will be up to the seller to determine how much they want in order to feel confident that you won’t walk away from the deal without your deposit if you need to. Lenders also like to see that you have an additional 1.5% for closing costs, which means that even if you are putting 5% down, the lender will want to see that you have 6.5% in total cash to cover all expenses.

You should also be prepared to pay:

* Legal fees and disbursements.
* When buying a new home (newly built never lived in) you are sometimes responsible for GST and/or PST if applicable.
* Property or land transfer tax (in BC, 1% of the first $200,000 and 2% of the balance).
* Adjustments (payable to the vendor such as taxes).
* Interest.
* Property Taxes.
* Utility Payments.
* If in a Condominium type of ownership, condo or strata fees.
* Home inspection fees or any other ancillary service fees requested by you as the buyer (furnace inspection, appraisal fee, water quality/quantity tests for acreages).
* Mortgage loan insurance premium (if less than 20% down).
* Moving expenses.
* Renovations, repairs, paint, carpeting, window coverings.
* Furniture.
* Property/Condominium Insurance.

Additionally, once you have purchased your home you will incur regular expenses on a monthly, quarterly or yearly basis such as:

* Mortgage payments (you can do these weekly, bi-weekly, or monthly)
* Water/sewer payments
* Electricity and gas services
* Cable/telephone/internet services

* Property taxes
* Strata or Condo fees
* Repair/Maintenance expenses
* Homeowners insurance

Don’t let this list of additional expenses worry you about buying a new home. All of these costs are part of purchasing a home and are well worth it. If you are interested in buying real estate be sure to contact us. When working with us we will sit down and go over a detailed list of expenses you will incur when buying a home. There are different expenses depending on the type of home you purchase. We can also put you in contact with many different vendors throughout the city that will be able to provide you competitive pricing on many of the associated costs. Be sure to contact us if you are looking to buy, anywhere in Canada.

ONGOING COSTS ASSOCIATED WITH OWNERSHIP
Sample annual expenses when owning a $500,000.00, single family residence. Property Taxes: Conservatively budget 1% of value of house

UTILITIES
Hydro: $100.00/month
Gas: $2500.00
Water: $500.00
++ Monthly mortgage payments
Maintenance
Annual house & fire insurance $600/year
Monthly condo maintenance fees if applicable.

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Jason Lorenz | Owner | 
jason@lorenzdevelopments.com

Squamish: 604 892 7652
Vancouver: 778 378 7652

 

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