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Costs Associated with Buying Property

When calculating if you can afford to purchase a property,

don’t just figure out a rough downpayment and quickly move

on from there. Several other costs need to be considered when

buying a property; these are called your closing costs. Closing

costs refer to the things you’ll have to pay for out of your

pocket and the amount of money necessary to finalize the

purchase of a property.

And like most things in life, it pays to plan ahead when it comes

to closing costs. Closing costs should be part of the pre-

approval conversation as they are just as important as saving

for your downpayment.

Now, if your mortgage is high-ratio and requires mortgage

default insurance, the lender will need to confirm that you have

at least 1.5% of the purchase price available to close the

mortgage. This is in addition to your downpayment. So if your

downpayment is 10% of the purchase price, you’ll want to have

at least 11.5% available to bring everything together. But of

course, the more cash you have to fall back on, the better.

So with that said, here is a list of the things that will cost you

money when you’re buying a property. As prices vary per

service, if you’d like a more accurate estimate of costs, please

connect anytime, it would be a pleasure to walk through the

exact numbers with you.

Inspection or Appraisal

A home inspection is when you hire a professional to assess the

property's condition to make sure that you won’t be surprised

by unexpected issues. An appraisal is when you hire a

professional to compare the property's value against other

properties that have recently sold in the area. The cost of a

home inspection is yours, while the appraisal cost is sometimes

covered by your mortgage default insurance and sometimes

covered by you!

Lawyer or Notary Fees

To handle all the legal paperwork, you’re required to hire a

legal real estate professional. They’ll be responsible for

transferring the title from the seller's name into your name and

make sure the lender is registered correctly on the title.

Chances are, this will be one of your most significant expenses,

except if you live in a province with a property transfer tax.


Depending on which province you live in and the purchase

price of the property you’re buying, you might have to pay a

property transfer tax or land transfer tax. This cost can be high,

upwards of 1-2% of the purchase price. So you’ll want to know

the numbers well ahead of time.


Before you can close on mortgage financing, all financial

institutions want to see that you have property/home

insurance in place for when you take possession. If disaster

strikes and something happens to the property, your lender

must be listed on your insurance policy.

Unlike property insurance, which is mandatory, you might also

consider mortgage insurance, life insurance, or a disability

insurance policy that protects you in case of unforeseen

events. Not necessary, but worth a conversation.

Moving Expenses

Congratulations, you just bought a new property; now you

have to get all your stuff there! Don’t underestimate the cost

of moving. If you’re moving across the country, the cost of

hiring a moving company is steep, while renting a moving truck

is a little more reasonable; it all adds up. Hopefully, if you’re

moving locally, your costs amount to gas money and pizza for



Hooking up new services to a property is more time-consuming

than costly. However, if you’re moving to a new province or

don’t have a history of paying utilities, you might be required to

come up with a deposit for services. It doesn’t really make

sense to buy a property if you can’t afford to turn on the power

or connect the water.

So there you have it; this covers most of the costs associated

with buying a new property. However, this list is by no means

exhaustive, but as mentioned earlier, planning for these costs is

a good idea and should be part of the pre-approval process.

If you have any questions about your closing costs or anything

else mortgage-related, please connect anytime; it would be

great to hear from you!


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