Costs of Home Ownership - Now and in the Future!

The importance of thoroughly researching the entire home buying process and the associated costs of home ownership cannot be overstated.

While working with a reputable realtor and mortgage broker will help prevent home buyers from making some of the more common mistakes associated with the purchase process, clients must be proactive in educating themselves with respect to the hidden costs of home ownership.

Overview of closing costs

While much of the home buyer’s attention is often focused on the deposit, total mortgage amount or monthly mortgage payments, buyers should also budget from 1.5% to 4% of the total cost of their home for closing costs.    

Expenses like land transfer tax, legal fees, home inspection fees, title insurance, property insurance, taxes on mortgage insurance, appraisal fees, moving expenses, renovations or repairs, utility hookup fees and prepaid property or utility bills can all make up part of your upfront closing costs you will need to account for.

Budgeting for 1.5% - 4% for the purchase of a $450,000 home, would mean having an additional $6,750 to $18,000 available for closing costs.

Future costs of home ownership

Home buyers also need to consider and budget for ongoing costs associated with home ownership.

Depending on the mortgage product you are signing up for you may have to account for potential increases in interest rates.  If you’re buying a condo you will have monthly condo fees to account for.

Another major consideration when buying any home are you’re home upkeep and maintenance fees.  I have seen some budget estimates as high as 3% - 5% of the value of your home for upkeep and maintenance expenses each year. On a $ 450,000 home, that equates to $13,500 to $22,500 annually.

Whether it's a leaky pipe, a cracked basement wall, or replacing windows, a furnace or a roof, home maintenance costs can be quite expensive and rather untimely when caught in an emergency situation with insufficient savings on hand to deal with the expense. 

Stay informed…

“Helping you find a mortgage…and peace of mind”

 

Domenic Mirabelli

Mortgage Intelligence
416.303.4480
domenic.mirabelli@migroup.ca