When it comes to getting ready to buy your first Calgary home, many future homeowners can spend hours scouring online listings for the perfect house and tweaking their budget. They calculate their income, their expenses, and how much is left over for a mortgage payment, and they feel ready to go out and find that dream home. But what first time homebuyers may not realize is that there are a lot of expenses beyond the mortgage that need to be accounted for.
Big One-time Costs
don’t usually slip by forgotten. These include your down payment and necessary legal fees. The down payment is the part of your house’s expense that you pay out of pocket. It proves to the bank that you’re serious about your purchase and have the ability to budget and save money. The down payment is usually between 5-20% of the house’s closing cost. However, if you pay less than 20% down then you’ll also need to juggle paying premiums for mortgage loan insurance.
When you make an offer to purchase, you’ll also need to include a deposit — the deposit is usually a portion of your down payment. If your offer is accepted and you back out without legal protections, your deposit may not be refunded.
Buying a home is also going to include legal fees and related costs. These fees must be paid on closing day. If the land around your home hasn’t been surveyed or a survey isn’t available, you’ll have to pay for that as well.
Smaller One-time Costs
can add up very quickly. Property appraisals, home inspections, and home insurance are all important costs that can be overlooked. An independent property appraisal will help you determine what the property is worth so that you can make your offer accordingly. A home inspection is vitally important. Skipping this step can mean accidently buying a home with all sorts of hidden problems like mold, asbestos, or structural problems. Home insurance, while not legally mandatory in Canada, is a necessity if you’re borrowing money from a lender.
If you’re buying a rural home, you may also need to have the well and septic system checked.
Moving Costs
are a mixed bag of big and small expenses. You may need to factor in the cost of appliances which can quickly pile up, the cost of the labourers and a truck aren’t small either, and you’ll definitely need to buy at least basic window treatments, gardening equipment, and a shovel for the winter months.
When you’re getting ready to buy your first home, there’s a lot to keep in mind. You’ll suddenly be fully responsible for the property. If it floods or an appliance stops working, it’ll be your responsibility to see that it gets fixed. This can be both a scary and exciting time, so be sure that you’re prepared for both! Do you have any questions about buying a home in Calgary? I can help! Call me today.