13 Extra Costs to be Aware of Before Buying a Home



Whether you're looking to buy your first home, trading up or down, there are many costs that you must figure into your calculation of affordability.  The last thing you need are unbudgeted financial obligations cropping up hours before you take possession of your new home.

 

Some of these costs are one-time fixed payments, while others represent a monthly or yearly commitment.  Not all of these costs will apply in every situation, however it's better to be aware of them so you can budget accordingly.
 

The following list  of 13 Extra Costs to be Aware of Before Buying a Home will help you budget properly for your upcoming 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 approximately $175 to $300. 


2. Property Taxes


Depending on your down payment, 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 payments, 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 updated property survey. The cost for 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 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 complexity of the issues and the experience of the lawyer.


7. Mortgage Insurance


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 financing. 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 0-20% higher during peak demand seasons. 


10. Maintenance Fees


Condos charge monthly fees for common area maintenance such as grounds keeping 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 from region to region.  


If you have any questions about buying a home or the costs involved, the Home & Property Team is here for you.  We can also connect you with the trusted mortgage professionals in our network.  And if you’re ready to start shopping for a new home, we’d love to help you with your search.  Contact us today!

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