Moving Financials Blog - Lara Stasiw Real Estate

Some financials associated with buying real estate are obvious & self-explanatory. Although once you get caught up in the busyness of it all… it’s easy to overlook & forget some of those “obvious” costs. That’s why I’ve put together a list of common financials to consider when buying a home!

Down Payment

Saving for a down payment is the trickiest part of the home buying process. It’s the part making it difficult to both live & buy into the Toronto housing market. With housing prices & the cost of living on the rise in recent years, saving 5-10% for a down payment on a single income has been difficult for many.

Start saving early to make it past this first hurdle! Set a savings plan & stick to it. Don’t discredit the amount you’ll save living at home or with roommates. While living on your own may seem enticing… take a quick look at how much rentals are in Toronto & realize how fast that can add up to a down payment!

Remember, the more you pay in a down payment, the less you’ll pay in interest long term.

Deposit

So you’ve saved enough for a decent down payment… you’ve found your perfect property & are ready to offer. But your moneys tied up in a savings account… HUGE problem!

If you’re ready to look for a property, you must have enough money readily available for a deposit. It’s a common misconception that you won’t need funds until you close on a property. That’s untrue!

A 3-5% deposit (bank draft or certified cheque) must be delivered to the Listing Agent’s brokerage upon acceptance of an offer!

Government Help

The First-Time Home Buyer’s Tax Credit allows you to claim $5000 for the purchase of a qualifying home.

Qualifications:

  • you or your spouse or common-law partner acquired a qualifying home
  • you haven’t lived in another home owned by you or your spouse or common-law partner in the year of acquisition or 4 years prior

Many of you may have heard of the new First-Time Home Buyer Incentive. It is aimed to help first-time home buyers afford a home without adding to their financial burdens by offering a 5 or 10% shared equity mortgage with the Government of Canada.

Qualifications:

  • minimum down payment for an insurable mortgage
  • maximum qualifying income is no more than $120,000
  • total borrowing limited to 4 times the qualifying income

The program launches September 2nd, 2019.

There is also the Home Buyer’s Plan that allows you to withdraw up to $25,000 from your RRSP’sĀ  to build or buy a qualifying home. This limit is budgeted to increase to $35,000 for withdrawals made after March 19th, 2019.

Home Inspection & Appraisal

You may forgo a home inspection or appraisal if the conditions are right. There may be even be a pre-list home inspection. In many cases, it’s advisable to conduct your own & this is a viable expense.

Moving Financials Blog - Home Inspection

Land Transfer Tax

If you don’t qualify for a first time home buyer’s credit (& even if you do), LTT can be a big sum of money that has to be accounted for in your budget!

Lawyer's Fees

As with everything in life… you get what you pay for. You may find a lawyer that ‘ll conduct closing for $500, but will they properly review all components of your building’s status certificate? Do they really care about all aspects of your transaction?

Just something to consider…

Either way, don’t forget to factor in Lawyer costs for any real estate transaction!

Insurance

That fun bit of money you get to pay for every year! Bundle it with car or life insurance if you want… but don’t forget about it!

Property Taxes

Make sure you know what they are & plan accordingly! Your property tax bill can creep up on you & usually makes a pretty large dent if you aren’t prepared.

If you’re purchasing a new build,Ā  property taxes won’t take effect until the building is incorporated. They’re generally billed out in 2 larger invoices for the first year, then the typical 6 smaller annual payments every year thereafter.

Moving Financials Blog - Condos

Condos Fees, Hydro & Rental Items

Know what your monthly maintenance fees are if you’re purchasing a condo or common element townhouse. Even freehold towns sometimes have a monthly maintenance fee for small things like snow removal on a common drive.

Hydro – a pretty obvious one but still has to be mentioned.

Did you know a lot of condos don’t include your heat pump in the purchase price? Many put you on a rent-to-own plan, sometimes with an option to purchase. If you are buying a listed pre-owned condo, make sure you are aware of these types of rentals & budget accordingly!

Same goes for freehold homes. HVAC rentals are increasingly common. Alarm system fees are another item often overlooked & not budgeted for.

Moving Costs

Whether you’re hiring movers or renting a U-Haul to move yourself, there are always costs associated with moving. If you’re in a building, you’ll have to provide a refundable elevator deposit. Moving items like boxes, tape & bubble wrap can add up fast. Keep moving costs in mind!

Moving Financials Blog - Moving Costs

Upgrades & Small Improvements

Small improvements can make a big difference in making a space feel like it’s your own. Maybe it’s a new toilet seat. Could be a kitchen faucet with a retractable handle so you can properly wash your sink. Maybe it’s upgrading the lighting to LEDs so a dim lit condo feels brighter & airier!

This is definitely the most exciting place to spend your money outside of buying the property itself. It’s also the one cost that helps to make your new house, your new HOME!

Happy spending šŸ™‚

Good Luck!!

Lara Stasiw ā€¢ Real Estate Agent & Home Design Connoisseur

Lara Stasiw West Toronto Real Estate Blog

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