Chat with us, powered by LiveChat
Total Costs Involved in Buying a Home2012-12-03T06:32:27-07:00

There are numerous extra costs that you may be uninformed of, which arise when you’re purchasing a new home. These costs are separate from the price that the seller approved. More often than not, people tend to skip these in their budget plans. So before buying a new home, do go through this list so that you know what to expect in terms of costs so that you can save sufficient funds for the entire process, prior to making the actual move.

Home Inspection

Home inspection is a prerequisite  for quite a few mortgage lenders, and costs somewhere between $300 and $600. The actual value will depend on the size of your home. While many of you may not be in a favor of getting the home examined, it is better to do so because you might have to pay more later on.

Appraisal Fee

The appraisal fee is a percentage of the actual market value or selling price of the home. Most lenders charge around $300 to $400, but you can get a wavier in some situations if your credit report is good enough.

Home Insurance

Many banks or mortgage brokers require you to insure the home you’ve purchased to protect it from incidents like fire and floods. Prices for a standard coverage policy range between 1% and 2.75% of the total mortgage amount.

Land Survey

You may have to get an updated survey on the land before the mortgage agreement is signed. At times, the seller may pay for this, but if he does not, you will have to spend something above $1,000.

Mortgage Insurance

You will have to buy a CMHC insurance policy if cannot pay a down payment more than or equal to 20%. This is just a precautionary step taken to protect the lender from unwanted and unexpected incidents. Mortgage insurance depends on a number of factors such as the total mortgage amount, the repayment period and the down payment.

Generally, mortgage insurance is taken to be 1.75% of the total mortgage value if the down payment is more than 15% and less than 19.99%, and the term period is not greater than 25 years.

New Home Warranties

New home warranties are obligatory in the regions of Ontario, Quebec and British Columbia. The total cost is generally within $300, varying with coverage level and price.

Land Transfer Tax

Land transfer tax is basically a fee for changing ownership of the property. It can be range between 0.5% and 2% of the total house value, depending on the area of the property.