Expenses to expect when buying a home

Budgeting for a new home can be tricky. Not only are there mortgage installments and the down payment to consider, there are a host of other—sometimes unexpected—expenses to add to the equation. The last thing you want is to be caught financially unprepared, blindsided by taxes and other hidden costs on closing day.

These closing costs vary: some of them are one-time costs, while others will take the form of monthly or yearly installments. Some may not even apply to your particular case. But it’s best to educate yourself about all the possibilities, so you will be prepared for any situation, armed with the knowledge to budget accordingly for your move.

What expenses to expect when buying a home:

• A deposit when you put in an offer on a home:

Although not a cost, it is money out of your pocket until it becomes part of your down payment. Read more about the differences between a deposit and a down payment.

• Inspection by a certified home inspector:

Prices for home inspections vary greatly in Calgary. But before you think of saving money on a home inspection, learn what a home inspector inspects. Buying a brand new home? A home inspection is strongly advised, even for brand new homes!

• Appraisal fee:

Your lending institution may request an appraisal of the property. The cost of this appraisal is your responsibility. Learn more about the difference between a CMA and an appraisal.

• Legal fees:

A lawyer is involved in every real estate transaction to review all paperwork, transfer title, transfer funds, etc. Rates offered by Calgary lawyers don’t range a lot. However, shop around and do your research to find a good lawyer. If you are in need of a reliable real estate lawyer, contact us.

Avoid costly mistakes when buying a home

• Homeowner’s insurance:

Your home will serve as security against your loan for your financial institution. You will be required to buy insurance in an amount equal to, or greater than the mortgage loan.

• Land transfer (purchase) tax:

This tax applies in any situation in which a property changes owners and can vary greatly. Your lawyer can explain more about this subject.

• Renovation of your new home:

In order to “make it their own,” many new homeowners like to paint or invest in other (small) renovations prior to, or upon moving in to their new home. If this is your plan, budget accordingly.

• Maintenance fees:

Any home needs maintenance. Learn more about the costs to keep your new home in great shape. If you are moving to a new condominium, you will be charged a monthly condo fee which covers the costs of common area maintenance.

• Condo Document Review Specialist:

If you are buying a new condominium, it is strongly recommended to have a specialist review the condo documents. What are the laws and bylaws? Is the building financially healthy? Are there any special assessments in place?

• Service charges:

Any utilities you arrange for at your new home. Cable, telephone, utilities, etc. may come with an installation fee or require a deposit.

• Moving expenses:

Rent a truck, buy moving boxes and treat your helping hands to pizza!

 

 

Please note: this list may not be complete. The above is general information and not considered legal advice. We do our best to write informative articles about real estate in Calgary, Alberta. If you have any questions or concerns about our comments, please feel free to contact us or speak to your legal advisor.