Buying a home is one of the most significant financial decisions a person will make – and it requires much planning and thought. Aside from saving up a down payment, building a nest egg for renovations and filling your home with new furnishings and appliances, there are other necessary costs to be aware of.
To help you feel prepared about buying a new home, here are seven of the most forgotten expenses that catch home buyers in Mississauga by surprise:
1. Home Inspection
Before you make a final offer on a home, it is recommended that you get a professional home inspection to ensure that everything is in good working order. If there are deficiencies, you can negotiate a lower price, have the sellers fix the issue or walk away altogether. A home inspection can range anywhere from $300 to $500 in Ontario, depending on the house's location, size and age.
2. Property Appraisal
When applying for a mortgage, your lender may require an appraisal to get an estimate of the property's value, or you may need one for financing purposes. In Ontario, the price for a property appraisal ranges from $300 to $500.
3. Property Survey
A lender may also require a property survey when applying for a mortgage, which is a legal document that identifies boundaries and setbacks, buildings or other restrictions that can impact a home's value. If the home seller does not have a property survey, you can hire a professional land surveyor to complete one. Many factors determine the cost of a property survey, including lot size and shape, number and size of structures, natural features (such as trees, hills or swamps) and the property's age.
4. Title Insurance
Your real estate lawyer may encourage you to purchase a title insurance policy, which protects you and your lender from title fraud, municipal work orders, zoning violations and other property defects. This one-time insurance fee can range from $250 to $500 in Ontario and get added to your legal bill.
5. Property Insurance
Before you can close on your property, your lender will require you to have property insurance in place to protect you in case of a fire, flood or another disaster. On average, the cost of home insurance in Ontario is $1250 per year.
6. Land Transfer Tax
All provinces (except Alberta and Saskatchewan) have a land transfer tax, but homebuyers in Toronto also incur an additional municipal tax. The tax is based on the home's purchase price and sometimes other factors. To help offset the cost, the Province of Ontario and the City of Toronto offer land transfer tax rebates for first-time homebuyers.
7. GST/HST
Newly constructed and substantially renovated homes may be subject to GST/HST. Fortunately, there's the GST/HST New Housing Rebate, which provides some relief to homebuyers. You can read more about the rebate here.
Sound Advice to Guide You Home
If you are considering buying a home or condo in the Greater Toronto Area, contact me, Deborah Clerk, Real Estate Sales Representative, ASA, with Deborah Clerk, Sales Representative at Keller Williams Realty, Brokerage, in Mississauga, Ontario. Together we can review your homeownership goals, budget and overall needs to find the perfect property you've always dreamed of.
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