You have decided to own a house. The papers are ready to be signed. At this stage, before you move, it might be wiser to be acquainted with a few additional costs beforehand. These might seem a bit daunting at first, but if you know these, it makes the process more streamlined and hassle-free.
Home Inspection Fees
Even though this is purely your own decision, you should probably get your home inspected, just to be safe. There could be certain aspects that you could miss, but would be caught by a professional. Best case scenario, minor issues which you can get adjusted in the price of the house. Worst case scenario, you could be sitting on a potentially dangerous structure and not even know it. So we say, better safe than sorry.
Estimated Cost: About $500 plus GST/HST
Property Appraisal/Valuation Fees
If you are putting 20% or more down or there are some issues with the property that the Lender or Insurer are curious about, a property appraisal may be required to evaluate the value of the property.
Estimated Cost: $250 to $500 on average
Property Survey Certificate Fee
A property survey certificate ensures that the structure is within the boundaries of the property line. It also ensures that the setback of your structure is within the legal limits of fire code etc. and that you are not encroaching on other parcels of land owned by others It may be required by your mortgage lender to better get an idea of the property, or just for the peace of mind in case its need arises when someone adjacent to you is building any structures.
Estimated Cost: $800 to $2000
This insurance is to protect the owner from any title defects which pose a potential threat to the owner’s full rights to sell the property and is often accepted in lieu of the survey certificate.
Estimated Cost: $300 to $500
Land Transfer Tax (LTT)/Municipal And Provincial Tax
This is usually one of the larger costs of owning a home. It is usually taken as a percentage of the purchase price of the home/property. This tax varies from province to province, and it is usually wise to consult your mortgage professional about this. An estimation of this is complex, but you can use this calculator to see what your estimated cost would be.
Link: (attach a link for a land transfer tax calculator)
These are fees associated with title changes, fund disbursements or any fees incurred to meet the conditions of the Lender. Although these fees are generalized as “legal fees” they are made up of a variety of different fees associated with the transaction and will vary from transaction to transaction.
Estimated Cost: $500 to $2500, varying from transaction to transaction
These costs include any utility bills, property taxes and other maintenance fees that are already paid in advance by the seller. These are usually settled in the purchase price of the house and reimbursed to the seller.
For detached homes, you can get general insurance to cover any damages caused by disasters such as earthquakes, fires, floods etc. For stratas, a strata policy exists paid for through your monthly strata fees. However, it is always prudent to review your policy with an Insurance Agent to ensure you have proper coverage. You may also get insurance to cover your own unit and contents as well as any damages you are liable for to other units.
Estimated Cost: Depends on the package and level of coverage you choose
PST/HST on Mortgage Default Insurance
This is only applicable if your down payment is less than 20%. This is considered a high-ratio mortgage, which necessitates a mortgage default insurance.
These are often included in the purchase price of the house, but if you are doubtful, you can confirm with your mortgage lender. They vary a lot as they are taxed both by the federal and the provincial government.
Estoppel Certificate Fee
This is only applicable if you are buying a condominium. The fee is essentially for a status certificate detailing important information regarding the property.
Estimated Cost: Upto $100 or a bit more
Mortgage Life/Critical Illness/Disability/Job Loss Insurance
This is an optional insurance that you can opt for. It helps protect you and your family in case of difficult times in the form of any debilitating illness, accidents leading to disability or job loss. This ensures that even in those harsh times you and your family would have a roof over your heads.
These costs are small expenses, that when piled up, can become significant if not planned beforehand. These include:
- Movers fee
- New appliances
- Small repairs
- Cleaning the house
These vary a lot person to person, but should be kept in mind so you don’t disturb your budget at the end.