Rear-view of an embracing couple looking at their new home proudly
First-Time Home Buyer Budgeting:
What You Need to Know As a first-time home , buyer, you probably already know you’ll need a chunk of cash for a down payment. But lots of other costs can creep up when it’s time to jump into the real estate market, so
it’s a good idea to save up for them and be ready for when the time comes to make an offer.
Start budgeting early
Once you decide you want to buy a home, you have lots of homework to do, including figuring out what you can afford.
Prepare for extra costs associated with buying a home.
Beyond the significant deposit on the home, you might have to pay extra for a parking spot if you’re purchasing a condo. You’ll also need to put some cash away for a professional home inspection, which could run between $500 to $1,000 or more depending on where you live.
Then there are different closing costs you might have to pay on top of the final price for the property. Some costs are offset by various tax credits, which your REALTOR® can explain.
Land transfer fees is based on the municipal assessment and can be anywhere from 0.5% to 1.5% of the total cost of your home. You can use the REALTOR.ca Land Transfer Tax Calculator to get an idea of what some costs might be.
Then there are attorney’s fees to pay for, which cover the research and paperwork associated with the transfer of properties. Sometimes, you’ll have other smaller costs, like reimbursing the sellers if they paid for certain utilities in advance or a fee to change the locks if you choose to do so. It’s also important to have a cushion for things like installing a security system, plus fun stuff like buying new furniture or sprucing up your décor, etc.
Let your REALTOR® guide you through the process
Working with your Raealtor will be extremely helpful because together you can talk through your needs, wants, and budget.
Talking with your Realtor will help you to evaluate what’s important to You. Your Realtor can help you determine what type of neighbourhood you would like to live in, do you need to be close to public transportation, how many parking spaces do you need – 1 or 2 spaces, would you prefer a condo, but perhaps not in a super modern, fancy building where your condo fees could be quite expensive.”
They also discussed which types of properties would be good for resale down the road, plus the option of renting out a bedroom to a student to help offset part of the mortgage cost. When you’re a first-time home buyer, you’ll have lots of questions.
The best solution is teaming up with a REALTOR® who can pave the way for you.
For more information, consult the Canadian Real Estate Association’s (CREA) Home Buyers’ Road Map, which features more great tips to make the home buying journey easier.
The information discussed in this article should not be taken as financial or legal advice. This article is for informational purposes only.
Land Transfer Tax
Home Buyers Road Map
Mortgage Payment Calculator Canada | REALTOR.ca
