Buying a condo: did you think through all the costs?
Purchasing a property is a significant investment that needs to be properly planned. You will need to calculate the down payment you are able to put, as well as monthly mortgage payments. By budgeting for your purchase, are you sure you included all the costs? Here are some of the significant costs that come with purchasing a property, which you may have forgotten about!
1. Welcome tax
The transfer tax – commonly referred to as welcome tax – will be charged to you at the time of purchase. It is more or less equivalent to 1% of the selling price.
2. Notary costs
It is the buyer who will have to cover notary costs. These costs vary from notary to notary, and generally range from $750 to $2000.
3. Inspection costs
It is essential to have the condo you are interested in inspected by a certified and experimented building inspector. His expertise will save you lots of worries! Inspection costs range from $300 and $1000, depending on the experience of the professional you want to hire.
4. Mortgage insurance
If the amount of your down payment is 20% below the selling price, your financial institution will ask that you buy mortgage insurance. Provided by the Canada Mortgage and Housing Corporation (CMHC), mortgage insurance can be paid in a single payment at the time of purchase, or in monthly payments spread over the life of your mortgage.
The costs related to mortgage insurance vary based on the purchase price of your property and on the amount of your down payment. Visit the CMHC website for details.
5. Building insurance
6. Tax adjustment
If the previous owner has already paid the municipal and school taxes, you will have to repay him a portion of the costs.
7. Moving expenses
We often forget about including moving expenses in the costs related to the purchase of a property; yet, these costs can be significant! These costs vary depending on the time of the year you move out (i.e. truck rental or moving services fees are much more expensive around July 1st) and your needs. The ideal solution is to examine your situation and establish a budget accordingly to avoid unpleasant surprises!