When considering purchasing a home, many people might think that it’s as easy as getting your offer accepted, but there are a lot of hidden costs associated with the purchase. Covering these costs is just one way you can take advantage of Coast Capital Saving’s $1,500 First Time Homebuyers Housewarming Gift.
Here are five costs to consider when buying your first home:
1. Down payment
Have you saved enough for a down payment on your home? The amount of your payment is determined by what kind of mortgage you have and can be as little as five per cent down. Here are the two types of mortgages that determine the required down payment:
- High-ratio mortgage – your down payment is less than 20 per cent of the purchase price
- Conventional mortgage – your down payment is at least 20 per cent of the purchase price
2. Appraisal fee
Before approving your mortgage, some providers will require an appraisal of the home, which can cost from $200 to $400.
Additionally, at a cost comparable to the appraisal, some lenders might require an up-to-date survey of the property.
3. Home inspection fee
Once your offer has been accepted, a home inspection can be conducted as a condition of the sale. As the buyer, home inspections are highly recommended and often help to uncover any problems the house may have. This process could potentially save you a lot of money in the long run. While they vary in price, home inspections can cost anywhere from $400 to $800.
4. Legal fee
In order to make the purchase of your home official, you’ll need a lawyer, or notary, to sign off, something that could cost you in the range of $1,000 to $1,500.
5. Property transfer fee
Did you know that you, the buyer, are responsible for paying the property transfer tax? This tax is calculated at a rate of one per cent on the first $200,000 of the property’s fair market value, and two per cent on the rest.
A home valued at $500,000 could lead to a $8,000 tax bill.
If you’re thinking of putting an offer on your first home, $1,500 could definitely come in handy for these expenses, or anything else your heart desires.
Feature Image: House for sale via Shutterstock