First time home buyers are often unaware of the full cost of purchasing a home. There are many other things to consider to fully get you set up in your new home. It’s a wonderful thing to own property in BC but let’s make sure you still have a good financial cushion to maintain the upkeep of your home and have you settled in and comfortable for the next few years to come. So, when it comes time to purchase a home, how much do you think it will cost? Let’s break down what are the other factors to consider when it comes to buying your first home.
First cost to consider is the down payment. When purchasing a property that costs less than $500,000, the down payment is as little as 5 percent. Homebuyers who purchase a house between $500,000 and $999,999 will make a down payment of five per cent of the $500,000 purchase price and ten per cent of the remaining balance. While a down payment of 5 percent is the minimum requirement, anything less than a 20 percent down price is viewed as a high-ratio personal loan and you will be required to purchase loan insurance. If you are putting down 20 percent or more, loan insurance is not required.
The deposit serves as a safeguard to guarantee that you do not lose your offer to another potential buyer. This is a guarantee to the seller that you are serious about purchasing their property. The deposit will be deducted from your down payment when you purchase the property. Your real estate professional will provide suggestions based on the listing price and the state of the market at the time of purchase.
Before you purchase your home, you may, and often recommended, want to do a home inspection. This cost will range between $-$ depending on the inspector and their services. In most cases, Home Inspections are required for buyers who put down less than 20% down payment to insure they can secure a mortgage for the desired property.
Mortgage lenders often require you to set up a house insurance plan to purchase a home with the mortgage. The insurance must be valid on the completion date or the date the last monies are put in trust, whichever is the latter. In addition, most lenders insist that property purchasers have fire and extended insurance.
Mortgage existence insurance is intended to assure that your loan is paid off if you cannot continue paying your loan before your loan is paid off. There is also domestic mortgage insurance, which shields the lender from the risk of a default on a loan. You will be advised to obtain a loan insurance plan if your down price is less than 20% of the purchase rate of your home. The premiums for this shape of insurance plan range from 0.6 per cent to around 4.5 per cent of the whole premium.
An attorney or notary will finalize all the purchasing paperwork. Title insurance and registering a title are services they typically include. It is reasonable to expect that the price will be in the range of $1000-1500. Legal prices vary from legal professional to lawyer and should be paid in full after the case. Ask your real estate agent for legal guidance; they may be in a position to recommend an attorney or notary.
Whenever you purchase a home, you will be obligated to pay a land transfer tax at the property’s closing. In British Columbia, the Property Transfer Tax (PTT) is a type of land transfer tax that is charged when a person purchases a home collected when the title of the home is transferred. Property transfer tax is a one-time provincial tax which must be paid only when a property is transferred to another owner.
The yearly tax is normally calculated based on the value of the property, which includes land.
The assessed taxes will be used by the local governing body to pay water and sewer improvements, as well as police enforcement, fire protection, education, road and highway development, libraries, and other community services.
The age, condition, and location of your home will come into play as you settle and maintain your home to get you set up for long term living. Your real estate agent team could possibly clarify foreseeable and surprising fees that may come up in your home, making sure that you have financial freedom for a rainy day.
Before, during, and after your purchase, we will go via all of the fees you’ll encounter.
Congratulations, you’ve purchased your new home! But how will you get all your things into your new place? Don’t forget to set aside moving costs for hiring packing, movers or renting a truck, or feeding your friends that will help you move! If you purchase your new home with us, Team Kleiner, you don’t have to worry about this! We’ll take care of it for you. Let’s get you into your new home with as less stress as possible!
You may be moving into your first home or moving into a bigger space so don’t forget to factor in the costs of purchasing new furniture. All the excitement of purchasing a home, you may not have time to think about what will happen after you’ve obtained your new home. So don’t forget this cost so you can quickly settle and enjoy your new home and the fruits of your labour!
We know this can be super overwhelming but Team Kleiner can help you through every step of your home buying journey!t Don’t forget, not only are we your real estate professionals, we are your packers and movers! Call us today!