As a first-time home buyer, there’s a good chance you already know that you’ll need to have a decent amount of cash saved up for a down payment on your new home. However, there are other costs associated with buying a home and stepping into the real estate market. It’s a good idea to know what these costs are and be ready for when the time comes to making an offer in the real estate market. The biggest thing that we can suggest doing is: being prepared. Doing your homework and getting an idea as to what the associated costs are before jumping in too far.
The down payment is obviously one of the biggest things that you’ll need to consider! However, you will also want to consider your other living expenses such as your car payments, home insurance, etc. Buying a house is great, but making sure you can afford to live in it is so important. We suggest consulting with your financial advisor to make sure that you have enough saved up and building a budget to make sure you can afford your monthly expenses.
Even when you get the numbers saying you can afford a mortgage of $1,500 per month, that’s just your mortgage payment. There are still utilities, property taxes, potential condo fees, and your other expenses like internet, Netflix and all that fun stuff! Overestimating here is not a bad thing! This way you won’t have any unpleasant surprises.
We also suggest putting money away monthly as part of an emergency or savings fun. For example, if your furnace breaks down, your roof leaks, or you need to upgrade a very dated kitchen. These are all associated costs that you’ll want to have some money saved for in the case they need to be dealt with in a timely manner.
Preparing for extra costs when buying a home is just good planning. Something else that we often don’t think about is whether you’ll have to pay extra for a parking spot when buying a condo. This has been common in larger cities like Toronto for a while now, but we are starting to see this practice develop in smaller centres as space becomes more limited.
Another cost to consider when buying a home is a home inspection. Over the past couple of years, home inspections took a bit of a back seat. It was not uncommon to purchase a house in the very competitive market we saw without any conditions. However, as the market begins to cool off we are seeing more and more conditions come back. For example, a home inspection can typically cost anywhere from $500 – $1,000. Again, this all depends on where you are purchasing a home. The associated costs typically vary depending on the cost of living where you are purchasing.
There are also different closing costs you will have to pay on top of the final price of your home. Some costs may be offset by various tax credits, which we will explain throughout the buying process. There’s also land transfer tax, another cost to factor in when purchasing a home.
Then there are also legal fees, these fees will cover the cost of the research and paperwork associated with the transfer of properties. This will need to be completed in order for you to close on your home.
Doing your due diligence upfront will save you headaches in the future! That’s what we are here for. As your Realtor, we will not only help you find your home, but make sure you’re always in the know about anything going on. We will walk through your plan and make sure that the home and finances are a good fit for your lifestyle.
As a first-time home buyer, it’s normal to have a lot of questions! It can very scary, after all it’s a big commitment and a huge financial purchase. We want to make sure that the decision you make is in your best interest.
If you’re a first-time home buyer looking to get into the real estate market, reach out to us today to talk about your options! We have a team of preferred partners, including lawyers, mortgage specialists, home inspectors and more who are all here to help you!
