Additional Expenses to Include In Your Budget

By
Real Estate Sales Representative with BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE

SOME ADDITIONAL EXPENSES TO INCLUDE IN YOUR BUDGET

Buying a home can be a very emotional event... and it can be very stressful ...  and in the excitement of the process, it's all too easy to forget the additional costs involved in any transaction of buying a home.  Keep in the mind that buying a home is one of the largest financial investments you will probably make and planning and budgeting for it is essential.  Talk with your agent and find out about them, and budget for them in the home buying process.

A Few Additional Costs You May Incur to Include In Your Budget

House Inspection This is an absolute must have, for both re-sale and newer homes.  Ask your agent to insert that condition in your offer. Home inspections usually take about 2 - 2 1/2 hours and the cost will range from $375.00 - $450.00 depending on the size of the home, and whether the basement is finished.

Appraisal When applying for your mortgage for your new home, most financial institutions require that an appraisal be done to determine how much they are prepared to lend you.  If this is not covered in the cost of the mortgage, it usually runs about $200.00 - $250.00.

Mortgage Costs Discuss the various payment options with your financial institution i.e. monthly, bi-monthly, weekly etc., to determine which one suits your needs.. Also discuss types and terms of the mortgage.  Types would open, closed, etc. and term means how long these rates will apply, i.e. 6  month term, 2 year term or 5 year term.  Amortization would indicate the total length or amortization period of the mortgage, i.e. 20 year, 25 year, etc. It would be advisable to obtain a pre-approval from your bank and lock in the interest rate while you shop for your home.  This way, if the rates increase, you are locked in... If the rates decrease, you can get the lower rate. These are normally valid for a period 90-120 days.

Insurance If you are only putting 5% down on your mortgage, mortgage insurance is mandatory, and usually a requirement with a 20% down payment, or less. It can include a minimal charge and would be slightly higher if you are self-employed without benefit of third-party verification of income.

Title Insurance Title insurance is a one time charge that you can ask your lawyer to include in your closing costs.  This will cover any unforeseen issues that you were not aware of that could appear after closing.  Title Insurance costs depend on the value or purchase price of the home, but an average cost is about $250 - $300 and is a one time charge.

Survey A survey document is an up to date document showing the exact property line, and all buildings, fences, etc. located on the property.  In many cases the Vendor will have one, and if your lawyer insists on having one, plan on spending about $1,000 - $1,500.  This would be beneficial if you are planning on making any changes to the property, i.e. installing a fence around the perimeter, installing a pool, etc.

Home Insurance This can sometimes be overlooked when calculating your monthly costs. Get a few quotations and make sure your enquire about any separate riders you may need for jewellery, furs, art, antiques, etc.

Condo Costs Some condos fees include costs such as hydro, heat, roofs, parking, windows etc., but some do not. These can be found in the Status Certificate, which your lawyer will review.  He/she will look for any deficiencies in the financial position of the condo corporation, ensure the insurance on the property is sufficient and in place, any special assessments that may be coming up, and a review of the monthly condo costs.

Legal Costs and Disbursements I would recommend you call at least 2 lawyers and ask what their fees are for closing on both buying and selling... and be sure to ask for the cost of disbursements.  Your lawyer will check the title to the property to ensure it is free and clean of liens or encumbrances.

Land Transfer Tax This tax is levied on every purchase and covers the cost of transferring the property from the previous owner to the new owner.  There are sometimes reductions offered by the Government for first time homes buyers, or senior buyers.  It usually calculates to be about 1% + - of the purchase price.

Repairs The house inspection will usually reveal small repairs or items to make note of for future repairs.  Sometimes it is just a bit of paint, of replacing an electrical outlet.. or as large as replacing the roof, or furnace. Take note, or bring a camera with you to record what repairs must be made, and also those repairs you would like to make in the future.  Your house inspector can offer an estimate on the cost of these repairs.  Your home inspection will usually be in written form and you will have a copy of any deficiencies the inspector noted in his report.

Replacements Make room in your budget for replacement items, such as window treatments, new appliances, or replacing the carpet with hardwood floors.  Costs will vary, depending on the items you choose to replace, but once again, get more than one quotation.

Moving Try to avoid moving at the end of the month, as moving companies normally charge a higher rate... June 30th is a date to avoid at all costs.  Get at least 2 estimates, and if you are moving small items yourself, make sure to include the cost of the small truck rental. Ask your Realtor to help with an approximation of the costs involved so you can budget for them..... The last thing you want are unexpected costs that could sabotage your purchase..... be prepared before you go shopping for that new home and know exactly what it will cost...

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Mississauga and Streetsville Real Estate


When you choose me to handle your real estate needs, you choose a real estate professional who cares about you and your family, who listens to your needs and who will put your interests first and foremost. I will work together with you, protecting your interests, to achieve your objectives.

I have been uniting families and homes for more than 31 years.. Let me put my 31+ years of knowledge and experience to work for you when selling or buying your next home.

 

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Roy Kelley 04/24/2018 02:00 AM
  2. Debbie Reynolds 04/27/2018 11:00 AM
  3. Gita Bantwal 06/03/2018 08:58 AM
Topic:
Home Buying
Location:
Ontario Peel District Mississauga
Tags:
mississauga homes for sale
mississauga real estate agent
gloria valvasori mississauga real estate
mississauga mls listings

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Rainer
65,994
Golden1 Agents
San Mateo, CA

Thank you For Sharing your thoughts. 

Apr 11, 2018 06:47 AM #1
Rainmaker
3,108,568
Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

Great information.  Thanks for sharing it with us and enjoy your Wed !

Apr 11, 2018 06:51 AM #2
Rainmaker
5,347,038
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is excellent information to share with prospective home buyers.

Apr 21, 2018 01:46 PM #3
Rainmaker
576,879
Gloria Valvasori, Accredited Senior Agent
BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE - Mississauga, ON
REAL Experience | REAL Commitment | REAL Results!

Thank you Kristin Johnston - REALTOR®  and Roy Kelley and Golden1 Agents !!

Apr 21, 2018 02:43 PM #4
Rainmaker
1,427,548
Kat Palmiotti
Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

These are good points. In our area, property tax can be a huge closing/buying expense as well. 

Apr 24, 2018 03:31 AM #5
Rainmaker
3,238,737
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

Many Buyers and Sellersa are not aware of additonal costs and who pays what...a net sheet with this information is a must for every agent.

Apr 24, 2018 04:52 AM #6
Rainmaker
1,488,058
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

Yes, there are so many expenses that can be overwhelming and unexpected in home buying/selling process. 

Apr 24, 2018 01:19 PM #7
Rainmaker
3,578,111
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Gloria. This is excellent, informative and well written. Should be a handout.

Apr 28, 2018 04:51 AM #8
Rainmaker
576,879
Gloria Valvasori, Accredited Senior Agent
BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE - Mississauga, ON
REAL Experience | REAL Commitment | REAL Results!

Good  morning Sheila Anderson thank you so much for taking the time to read and post your comment!

Apr 28, 2018 08:35 AM #9
Rainmaker
576,879
Gloria Valvasori, Accredited Senior Agent
BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE - Mississauga, ON
REAL Experience | REAL Commitment | REAL Results!

Hello Inna Ivchenko , that is so true, and it is our job to inform them to budget for those extra costs.

Apr 28, 2018 08:36 AM #10
Rainmaker
576,879
Gloria Valvasori, Accredited Senior Agent
BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE - Mississauga, ON
REAL Experience | REAL Commitment | REAL Results!

Hi Kat Palmiotti , many buyers forget about expenses involved when they become homeowners... and it is our job to inform them.

Apr 28, 2018 08:36 AM #11
Rainmaker
576,879
Gloria Valvasori, Accredited Senior Agent
BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE - Mississauga, ON
REAL Experience | REAL Commitment | REAL Results!

Hello Sally K. & David L. Hanson , thank you so much for your comments, much appreciated!

Apr 28, 2018 08:37 AM #12
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Rainmaker
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Gloria Valvasori, Accredited Senior Agent

REAL Experience | REAL Commitment | REAL Results!
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