Buying your first home is an exciting (albeit expensive) time in the life of any new mortgage payer. Unfortunately, you’ll discover fairly quickly that you’ll also need to pay fees for services and taxes you didn’t even know existed. Here’s a list of some of the extra expenses you can expect to come across as a new homeowner so you can ensure you have enough saved up before signing on the dotted line.
Taxes and Insurance
Welcome to the fun new world of paying property taxes. While the actual concept of paying property taxes might not be a surprise to you, the amount you’re expected to pay might be. Here’s some information on how property taxes are calculated in the province of Ontario.
Home Insurance is another extra cost you can look forward to. Be extra cautious when choosing a plan because not all of them are equal. Ask yourself what kind of coverage you need and ensure your plan includes it! Also be aware that some natural disasters (like flooding) are typically not covered by traditional insurance (which can be a big issue depending on where you live).
Maintenance and Repairs
As a new homeowner, you’ll also be expected to take care of any home repair costs and expenses (for instance, putting in a new furnace/air conditioning unit or replacing the roof). You’ll also have to pay to have your lawn, driveway, and backyard maintained. Whether this means you hire a gardener/landscaper or do it yourself, you’ll still have to pay for everything out of pocket.
If you choose to buy a condo rather than a house, you won’t have to worry about lawn or roof upkeep but you will have to pay a maintenance cost. Even if there’s nothing that breaks or needs maintenance, you’ll have to pay the fee to the homeowner’s association each month.
Even once you’ve set aside money for your property taxes and home insurance, there are still some additional one time fees you’ll have to pay before you can take complete ownership of your home as a new homeowner.
These typically include:
- an Appraisal Fee
- a Home Inspection Fee
- a Property Survey Fee
- CMHC Fees
- Real Estate Fees
- Closing Costs (Land Transfer Tax, Legal Fees, Moving Expenses, Urgent Repairs, Utility Connections etc)
- a Title Insurance Fee
- Some new homes also include a GST or HST tax (make sure to ask before signing the deal)