In order to reduce the mortgage loan, some buyers, particularly when it comes to a first home, tend to use their financial resources to the maximum in order to make a substantial down payment. As a result, they no longer have any leeway to carry out the subsequent steps and find themselves in an unfortunate position.
• Read also: 10 things to remember before buying a house
To guide them, here is a checklist of the short-term expenses that must be assumed when becoming a homeowner.
1. Pre-purchase inspection
It is advisable to include in the purchase offer an inspection clause in order to avoid unpleasant surprises. Expect $400 to $800.
2. Evaluation
Some financial institutions will require an appraisal of the property in order to know the market value. Sometimes they cover these costs themselves, other times they don’t. Cost: from $350 to $800.
3. Notary fees
It is mandatory to go before a notary to carry out the transaction. The buyer chooses the notary and assumes the costs. Expect $1500 to $2000.
4. Property and school taxes
During the sale, the notary distributes the taxes paid between the parties, specifying the share of each. The buyer must reimburse the taxes that the seller has paid in advance.
5. Mortgage loan insurance
If you make a down payment of less than 20% of the value of the home, you will be required to purchase CMHC insurance. The premium is normally added to the mortgage, but in Quebec, provincial sales tax (QST) must be paid on the premium. We must pay the sales tax at the notary, it is not fundable.
6. Transfer duties or welcome tax
You cannot escape it, and the welcome tax often varies from one municipality to another.
7. Insurance
As soon as the date of taking possession is known, you should inform your insurer to make the necessary changes. Fees may result from these changes depending on the new coverage chosen.
8. Suppliers
Moving into a new home is a bit like riding a moving train. Depending on the property and the systems attached to it, suppliers will have to be contacted in order to update contact details and services such as fuel oil, propane gas, natural gas, etc. Attention, a filled tank will be invoiced to you during the signature at the notary.
9. Connections
The same is true for connections to networks: electricity, telephone, internet, etc.
10. Interior decoration
Before moving into your new home, you may want to do some work, such as freshening up the paint, installing curtains and blinds, etc. Some also take the opportunity to do more important work such as redoing the kitchen or the bathroom.
11. Landscaping
It is also a good time to do the big work on the ground. While the house is unoccupied, the imposing and noisy machinery does not disturb.
12. Moving expenses
You are now ready to occupy the premises. Several factors can affect the price of a move, including the preparation of the boxes, the size of the move, the types of furniture, the distance, etc. For a normal move, it takes $115 to $190 per hour including 2 or 3 movers and a truck.
Conclusion
There are many facets to owning a home and moving in, not to mention the surprises that can arise at any time. New owners must have sufficient financial resources to address these issues in order for the home ownership experience to be successful.
ADVICE
- Make three bids when you want to retain the services of a contractor.
- Ask your loved ones for advice. Most will be happy to share their experiences and recommend reliable suppliers.