In order to reduce mortgage loans, some buyers, especially when it comes to a first home, tend to max out their finances to make a significant down payment. As a result, they no longer have any leeway for further steps and find themselves in an awkward position.
• Also read: 10 things to consider before buying a home
As a guide, here is a checklist of the short-term costs you need to anticipate when buying a home.
1. Inspection before purchase
In order to avoid unpleasant surprises, it is advisable to include a viewing clause in the purchase offer. Expect $400 to $800.
2nd evaluation
Some financial institutions require an appraisal of the property to determine market value. Sometimes they bear these costs themselves, sometimes not. Cost: from $350 to $800.
3. Notary Fees
A notary must be commissioned to carry out the transaction. The buyer chooses the notary and pays the costs. Expect $1500 to $2000.
4. Property and school taxes
At the time of sale, the notary distributes the taxes paid between the parties and determines the respective share. The buyer must return the taxes paid in advance by the seller.
5. Mortgage Loan Insurance
If you make a down payment of less than 20% of the property value, you must purchase CMHC insurance. The premium is usually added to the mortgage, but in Quebec provincial sales tax (QST) is payable on the premium. We have to pay the sales tax at the notary, it is not eligible.
6. Transfer Duties or Welcome Tax
There is no escaping this, and the welcome tax often varies from municipality to municipality.
7. Insurance
Once the time of possession is known, you should notify your insurer to make the necessary changes. Depending on the new insurance coverage chosen, these changes may incur charges.
8. Suppliers
Moving to a new home is a bit like riding a moving train. Depending on the property and associated systems, suppliers may need to be contacted to update contact details and services such as heating oil, propane, natural gas, etc. Attention, a filled tank will be charged to you when signing at the notary.
9. Connections
The same applies to connections to networks: electricity, telephone, Internet, etc.
10. Interior decoration
Before moving into your new home, you may want to do some work such as: For example, freshening up the paintwork, putting up curtains and blinds, etc. Some also take the opportunity for more important work such as renovating the kitchen or bathroom.
11. Landscaping
It’s also a good time to do the big work on site. While the house is uninhabited, the imposing and noisy machines do not bother.
12. Relocation expenses
You are now ready to move into the premises. Several factors can affect the price of a move including how the boxes are prepared, the size of the move, the type of furniture, the distance, etc. For a normal move, it will cost you $115-$190 per hour including 2 or 3 movers and a truck.
Diploma
There are many facets to owning a home and moving in, not to mention the surprises that can crop up at any time. For homeownership to be a success, new owners must have sufficient financial resources to address these issues.
ADVICE
- Place three bids if you want to hire the services of a contractor.
- Ask your loved ones for advice. Most are happy to share their experiences and recommend reliable suppliers.