Breaking Down the Real Costs of Homeownership
Don’t Forget About Closing Costs
When planning to buy a home, most people focus on saving for the down payment. But the truth is, that’s only part of the equation. To actually finalize the purchase, you’ll also need to budget for closing costs—the out-of-pocket expenses that come up before you get the keys.
Closing costs can add up quickly, which is why they should be part of your pre-approval conversation right from the start. Lenders will even require proof that you’ve got enough funds set aside. For example, if you’re getting an insured (high-ratio) mortgage, you’ll need at least 1.5% of the purchase price available in addition to your down payment. That means a 10% down payment actually requires 11.5% of the purchase price in cash to make everything work.
Let’s break down some of the most common expenses you should prepare for:
1. Home Inspection & Appraisal
- Inspection: Paid by you, this gives peace of mind that the property is in good shape and doesn’t have hidden problems.
- Appraisal: Required by the lender to confirm value. Sometimes this is covered by mortgage insurance, sometimes by you.
2. Legal Fees
A lawyer or notary is required to handle the title transfer and make sure the mortgage is properly registered. Legal fees are often one of the larger closing costs—unless you’re also responsible for property transfer tax.
3. Taxes
Many provinces charge a property or land transfer tax based on the home’s purchase price. These fees can range from hundreds to thousands of dollars, so you’ll want to factor them in early.
4. Insurance
- Property insurance is mandatory—lenders won’t release funds without proof that the home is insured on closing day.
- Optional coverage like mortgage life, disability, or critical illness insurance may also be worth considering depending on your financial plan.
5. Moving Costs
Whether you’re renting a truck, hiring movers, or bribing friends with pizza and gas money, moving comes with expenses. Cross-country moves especially can be surprisingly pricey.
6. Utilities & Deposits
Setting up new services (electricity, water, internet) can involve connection fees or deposits, particularly if you don’t already have a payment history with the utility provider.
Plan Ahead, Stress Less
This list covers the big-ticket items, but every purchase is unique. That’s why it pays to have an accurate estimate of your personal closing costs before you make an offer.
If you’d like help planning ahead—or want a breakdown tailored to your situation—let’s connect. I’d be happy to walk you through the numbers and make sure you’re fully prepared.
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