According to Canadian Mortgage Trends, 13 percent of first time home buyers overlook some of the costs associated with purchasing a home and do not budget for any costs in addition to their down payment. These costs do not apply in all circumstances, but here is a list of items that I would recommend budgeting for with your transaction: Property Inspection, Appraisal, Property Transfer Tax, Legal Fees, Title Insurance, Mortgage Insurance, Property Insurance, Default Insurance, Realtor Commissions, Property Tax adjustments, and Interest adjustments.
Most lenders will require you to have 1.5 percent of the purchase price available for closing costs. For instance, if you were to purchase a property for $500,000.00, lenders will expect you to have approximately $7,500.00 prior to closing. Please note, as a first time home buyer, you are exempt from paying the Property Transfer Tax up to a purchase price of $425,000.00. As a bare minimum, I would still budget approximately $995.00 + HST for legal, $185.00 + HST for Title Insurance, $275.00 + HST for your inspection and $275.00 + HST for an appraisal if not covered by the lender.
If you would like a specific breakdown on what you are expected to pay in addition to your down payment, contact me today and I will walk you through the process.
As always, I encourage you to contact me if you have any questions with your current mortgage or are looking for one. If you are not interested in a mortgage at this time, refer a friend and earn $100.00! Please find me on facebook at facebook.com/jnmortgages on twitter @jasonmortgages.
Jason Nesseth with TMG The Mortgage Group Canada Inc. If you have any questions or comments about this blog, please feel free to call Jason at 604.375.7375, email jason.n@mortgagegroup.com or visit his website at jasonnesseth.com