How Much Will it Cost to Buy a House?
Buying a home is a big investment – likely the largest one you will ever make. The cost to buy a home should be carefully considered to avoid the risk of financial difficulty in the future.
Since this decision has a large impact on your wallet, we want to take some time to explore the many costs associated with buying a home. Doing your homework and knowing the average cost of these services in your neighbourhood will help you choose a home within a realistic price range.
Deposit: Depending on your location and the price of a home, you may need to put a deposit on a home as a security measure to ensure you don’t lose it to another interested buyer. If you are required to pay a deposit, it will become part of your down payment once you have purchased the home.
Down Payment: In Canada, the minimum amount you need to put down on a home is 5%. While this is realistic for most first time home buyers, having a down payment of 20% or more will help buyers avoid paying Mortgage Loan Insurance.
Land Transfer Tax: When you buy a home, you are required to pay a land transfer tax to the province upon closing. This tax is normally based on the amount paid for the land, as well as the remaining amount on any mortgage or debt assumed as part of the arrangement to buy the land. Cost will vary depending on your municipality, the size of the land and other factors. Alberta, Saskatchewan, and parts of Nova Scotia do not have Land Transfer Tax at all, while other provinces use a tiered system.
Appraisal Fee: An appraisal will normally cost between $200 and $300 but can vary depending on your location. This will help prevent you from borrowing more than you need to, and will prevent lenders from giving you too much.
Home Inspection: A home inspection is a necessary step in your home buying process and will normally cost an average of $350 depending on the size, age, and condition of the home. This helps ensure there are no unexpected maintenance or home improvement costs upon purchasing the home.
Property Insurance: While property insurance is likely already something you have factored into your budget, it’s important to do your research and find a reasonable quote that will ensure you are covered should anything unexpected happen.
Mortgage Insurance: There is mortgage life insurance, which is designed to protect the repayment of a mortgage if anything were to happen to you. There is also mortgage loan insurance if your down payment is less than 20% of the total house cost. Premiums for this type of insurance range from 0.5% to 3% and increase if you are self employed.
Lawyer Fees: The fee you will be charged by your lawyer will vary depending on the person representing you and must be paid upon closing. Ask your real estate agent for advice as they likely have a preferred trusted lawyer they can refer you to.
Title Insurance: Title insurance is a one-time-fee that provides protection from losses related to the properties title or ownership. Learn more about what it is in this blog post.
Property Taxes: The cost for property taxes is expressed as a dollar rate for every $1,000 estimated to be the market value of your property.
Maintenance and Energy Costs: Potentially your largest ongoing homeowner expense, these costs include lawn care/ yard work, professional services, additions/upgrades and the cost of keeping the house running year-round. You can use our monthly home budget planner to help map out all of these costs.
Moving Expenses: It’s easy to forget about the small things when moving, but it’s important to remember they can add up quickly! Consider the cost for phone, electricity, and other utility installations and don’t forget about movers, a moving truck and feeding your friends who are helping out!
Now that you have a better idea of the cost to buy a home, it’s time to hit the books to find out how much these services will cost in your area. Make a list, create a budget, and get started!
What is Title Insurance?
Becoming a first time home buyer can sometimes feel like travelling in a foreign country. Despite the research you’ve been doing for weeks, if not months, there is always something you are unprepared for.
We’ve all been there, and that’s why we want to make sure you’re prepared and knowledgeable when it comes time to talk about things like Title Insurance. What is it? Do you need it? We have all the answers you need to know below!
What is Title Insurance?
While title insurance is not mandatory in Canada, it is a good idea to look into it as it will protect both you as the buyer, and your lender against losses related to the property title or ownership. Does this still sound like a foreign language? Here is a list of what exactly title insurance will protect you from:
Do You Need Title Insurance?
As each property purchase is different, this question is something your real estate agent can help you answer with help from your lawyer, and insurance broker. Once you get a better understanding of the protection this insurance can provide you with, you will be able to make a more informed decision on whether or not this is the right option for you.
If you want to learn more about Title Insurance, The Financial Services Commission of Ontario has put together a helpful brochure with answers to all your questions from deciding whether or not you need it, to processing a claim. As always, a local RE/MAX Agent is another great resource you can leverage to get answers to all your questions, and to get information specific to your location in Canada.
6 Reasons Why You Need a Buyer’s Agent
Buying a home is a big undertaking, and all aspects should be carefully considered before any decisions are made. Not only do you want to find your dream home, but you want to do it within a reasonable budget. In hopes of staying within that budget, you may decide to cut some corners by carefully analyzing the things you want over the things you need.
In making these decisions, you may decide to skip using a Buyer’s Agent. Is this a good decision? No. Here’s why:
Hopefully we’ve convinced you of the benefits of a hiring a Buyer’s Agent. So, why should you choose a RE/MAX Agent?
The answer to this question is simple. RE/MAX Agents have a reputation of being the most trusted, high producing agents in the industry. They are the best in the business selling 1 in every 3 homes in Canada and will ensure you are taken care of throughout the home buying journey.
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Trademarks owned or controlled by The Canadian Real Estate Association. Used under license.
The information provided herein must only be used by consumers that have a bona fide interest in the purchase, sale or lease of real estate and may not be used for any commercial purpose or any other purpose.
Information is deemed reliable but is not guaranteed accurate by TREB.
Toronto Real Estate Board - IDX Last Updated: 6/26/2017 3:00:33 AM