Purchasing a home: 9 fees to keep in mind besides your mortgage
According to Jonathan Haziza, chief advisor for mortgage financing at National Bank, the scale of the costs linked to buying a property tend to be underestimated by first-time buyers.
His advice is to set aside at least 2 or 3% of your property value in case anything unexpected happens. So without further ado, here are some expenses to keep in mind for a realistic portrait of what lies ahead.
Your financial institution may ask for an evaluation of the property’s market worth. This happens when the cost is steep or the property contains various risk factors.
Hiring a building inspector to check for hidden defects in pre-existing houses is crucial. This will help you avoid bad surprises that could cost you a lot.
In Canada, any real estate transaction requires the services of a notary. The cost of this transaction varies depending on a number of criteria. Maître Pascale Gagnon, notary, says that: “The type of building, the number of buyers, and the number of separate accommodations, to name only a few, are some of the factors that could impact a notary’s rate. The best way to gauge fees is to directly contact a notary, who will evaluate your case taking into account all of your future residence’s parameters.”
As a home owner, certain taxes are to be expected: the costs of ownership transfer which municipalities apply whenever a property changes hands; CMHC tax, if applicable, (for example 9% in Quebec); municipal taxes; school taxes. These taxes vary by municipality and according to property value. When planning your budget, note that municipal and school taxes are recurring and need to be paid yearly, whereas the others only apply once, when you move.
Electricity, television, and Internet connection fees
Electricity connection fees are often forgotten by first-time buyers, as well as fees related to opening new Internet and television accounts. Contact your suppliers to check service availability in your new neighbourhood. If you’re moving into a new development, you may need to pay additional fees to connect your neighbourhood to various networks.
Keep some money aside for renovations. Take time to walk through your future dwelling to pinpoint improvements and repairs you’d like to take on.
Furniture and appliances
Your current furniture and appliances might not fit in your new home, or you might simply need to buy more.
Whether you hire professional movers or decide to do everything yourself, you’ll certainly need to take on a few moving-related expenses. Don’t forget to include them in your budget.
If you’re buying a condo, you’ll need to pay co-ownership fees, which include communal expenses such as interior and exterior maintenance, snow removal, etc.
Edited on 29 September 2016