13 Extra Costs Before Buying a Home
Whether you're looking to buy your first home, or trading up to a larger one, there
are many costs—on top of the purchase price—that you must figure into your
calculation of affordability. These extra fees, such as taxes and other additional
costs, could surprise you with an unwanted financial nightmare on closing day if
you're not informed and prepared.
Some of these costs are one-time fixed payments, while others represent an on-
going monthly or yearly commitment. Not all of these costs will apply in every sit-
uation, however it's better to know about them ahead of time so you can budget
properly.
Remember, buying a home is a major milestone. Whether it's your first, second
or tenth home, there are many important details to address, during the process.
The last thing you need are unbudgeted financial obligations cropping up hours
before you take possession of your new home.
Read through the following checklist to make sure you're budgeting properly for
your next move.
1. Appraisal Fee
Your lending institution may request an appraisal
of the property which would be your responsibility
to pay for. Appraisals can vary in price from approx-
imately $175 —$300.
2. Property Taxes
Depending on your downpayment, your lending
institution may decide to include your property
taxes in your monthly mortgage payments. If your
property taxes are not added to your monthly pay-
ments, your lending institution may require annual
proof that your taxes have been paid.
3. Survey Fee
When the home you purchase is a resale (vs a new
home), your lending institution may ask for an up-
dated property survey. The cost for this survey can
vary between $700-$1,000.
4. Property Insurance
Home insurance covers the replacement value of
your home (structure and contents). Your lending
institution will request proof that you are insured as
it protects their investment on the loan.
5. Service Charges
Any new utility that services your hook up, such as
telephone or cable, may require an installation fee.
6. Legal Fees
Even the simplest of home purchases should have
a lawyer involved to review all paperwork. Shop
around, as rates vary greatly depending on the com-
plexity of the issues and the experience of the lawyer.
7. Mortgage Loan Insurance Fee
Depending upon the equity in your home, some
mortgages require mortgage loan insurance.
This type of insurance will cost you between
0.5% -—3.5% of the total amount of the mortgage.
Usually payments are made monthly in addition to
your mortgage and tax payment.
8. Mortgage Brokers Fee
A mortgage broker is entitled to charge you a fee
in order to source a lender and organize the financ-
ing. However, it pays to shop around because many
mortgage brokers will provide their services free to
you by having the lending institution absorb the cost.
9. Moving Costs
The cost for a professional mover can cost you in
the range of:
+ $50-$100/hour for a van and 3 movers, and
+ 10-20% higher during peak demand seasons.
10. Maintenance Fees
Condos charge monthly fees for common area
maintenance such as groundskeeping and carpet
cleaning in hallways. Costs will vary depending on
the building.
11. Water Quality and Quality Certification
If the home you purchased is serviced by a well,
you should consider having your water checked
by your local experts. Depending upon where you
live, determines whether or not a fee is charged, to
certify the quantity and quality of the water.
12. Local Improvements
If the town you live in has made local improvements
(such as the addition of sewers or sidewalks), this
could impact a property’s taxes by thousands of
dollars.
13. Land Transfer Tax
This tax is applied whenever property changes
hands and the amount that is applied can vary.
Not intended to solicit property currently listed for sale. Copyright © Craig
Proctor Productions 2017