What does it really cost to buy a home?
When purchasing a home, typically there is a one-time cost as well as monthly expenses to consider. The down payment usually represents between 5 to 25% of the purchase price of the property and will be your largest one-time expense. Besides your monthly mortgage payment, there are monthly expenses such as property taxes, utilities, insurance and maintenance. At closing however, there may be additional expenses:
DEPOSIT: Once an offer has been accepted a certified deposit cheque or bank draft representing 2.5-5% of the selling price of the home will be required by the listing company to be held in trust until the closing date.
LEGAL FEES: Legal fees vary according to every lawyer but most will charge a flat fee. It is a good idea to clarify what the fee includes i.e. title search etc. and to get a few quotes from a few lawyers. Typically the fee will be $600 + up.
LEGAL DISBURSEMENTS: Also charged by your lawyer for fees that could include: tax certificates, deed registration, title search and miscellaneous fees for postage, photocopies etc. Please clarify these amounts with your lawyer prior to closing.
TITLE INSURANCE: An insurance policy that protects residential or commercial property owners and their lenders against losses related to the property’s title or ownership. Title insurance is available in situations regarding minor title problems and your lawyer will probably want you to have it. Title insurance can cost around $300+
HOME INSPECTION: An imperative decision when purchasing a home is to have a home inspection done on the property by a qualified home inspector. A home inspection will provide buyers with peace of mind, as it will show if the home is structurally sound and in good repair. The cost of a home inspection is approximately $400+ depending on the size of the home, age and location. As your real estate representative, I can provide you with the names of reputable home inspection companies.
INTEREST ADJUSTMENT: I arranging a new first mortgage, you need to be aware that some mortgage companies use the 1st or the 15th of the month as payment dates. If your closing date was not on one of these dates, the mortgage company may deduct from the mortgage monies interest from the date of closing and begin your payments on the 1st or 15th of the following month on a continual basis.
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