13 additional costs to consider before buying a first home
13 additional costs to consider before buying a home
“The last thing you need are the unexpected financial obligations that appear just before you take possession of your new home. "
Whether you are looking to buy your first home, or purchasing a larger home, there are many costs, in addition to the purchase price, that you need to consider in your affordability calculation. These additional fees, like taxes and other additional costs, can surprise you with an unwanted financial nightmare on the closing date if you are not informed and prepared.
Some of these costs are one-time, fixed payments, while others are an ongoing monthly or annual commitment. Not all of these costs will apply in every situation, but it's best to know them so that you can budget adequately.
Remember, buying a home is a key event. Whether it's your first, second, or tenth home, there are important details to consider during the buying process. The last thing you need are unscheduled financial obligations that show up just before you take possession of your new home.
Read the following checklist to make sure you've budgeted adequately for your next move.
1. Assessment fees
Your credit institution may request an assessment of the property you will pay. Appraisals cost approximately $ 175 to $ 300.
2. Property tax
Depending on your down payment, your lending institution may decide to include your property taxes in monthly mortgage payments. If not included, your lending institution may require annual proof that property tax has been paid.
3. Survey costs
When the home you purchased is for resale (versus a new home), your lending institution may request an updated property survey. The cost of this survey can vary between $ 700 and $ 1,000.
4. Property insurance
Home insurance covers the replacement value of your home (structure and contents). Your lending institution will ask for proof that you are insured to protect their investment in the loan.
5. Service charges
Any new utility that makes the connection, such as telephone or cable, may charge an installation fee.
6. Fees of a notary
Even the simplest home purchases should have a notary to go through all the paperwork. Take a look around the market, as the price of fees varies greatly depending on the complexity of the issues and the lawyer's experience.
7. Mortgage loan insurance costs
Depending on the equity in your home, some mortgages require mortgage default insurance. This type of insurance will cost you between 0.5% and 3.5% of the total mortgage amount. Usually, payments are made monthly in addition to your mortgage payment and tax.
8. Mortgage brokerage fees
A mortgage broker has the right to charge you a fee to find a lender and arrange financing. However, it is worth shopping around because many mortgage brokers will offer their services to you for free, asking the lending institution to absorb the cost.
9. Moving expenses
The costs of a professional mover can cost you around:
$ 50 to $ 100 / hour for a van and 3 movers, and
10-20% more during high demand seasons.
10. Maintenance costs
Condominiums charge monthly fees for maintenance of common areas such as grounds maintenance and carpet cleaning in hallways. The fees vary depending on the building.
11. Water quality and quality certification
If the home you have purchased has a well, you should consider having your water checked by your local specialists. Where you live determines whether or not a fee must be paid to certify the quantity and quality of water.
12. Local improvements
If local improvements have been made in the city where you live (such as adding sewers and sidewalks), property taxes can increase by several thousand dollars.
13. Tax on land transfers
This tax applies when the property changes ownership and the amount that applies may vary.