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Buying a home in Halton is an exciting step, but it’s also a significant financial commitment that goes beyond just the purchase price. Many buyers focus on saving for a down payment without fully considering the additional costs that come with homeownership. These expenses can add up quickly, and being prepared will help you budget effectively and avoid surprises during the buying process.
Understanding the costs involved can give you peace of mind and ensure a smoother transition into your new home. Whether you’re buying in Oakville, Burlington, Milton, or Halton Hills, here are the key expenses every buyer should plan for.
Down Payment and Deposit
The most obvious cost is your down payment, which is a percentage of the purchase price paid upfront. In Canada, the minimum down payment is 5% for homes under $500,000, but higher-priced homes require larger percentages. In Halton, where home prices are often above this threshold, many buyers aim for 20% to avoid paying mortgage default insurance. You’ll also need to provide a deposit shortly after your offer is accepted, typically ranging from 5% to 10% of the purchase price.
Land Transfer Tax
When buying a property in Ontario, you’ll need to pay a provincial land transfer tax, which is calculated as a percentage of your home’s purchase price. Fortunately, Halton buyers avoid the additional municipal land transfer tax charged in Toronto. First-time buyers may be eligible for a rebate to help offset this cost.
Legal Fees and Disbursements
A real estate lawyer will handle the legal aspects of your home purchase, including reviewing contracts, conducting a title search, and registering the property in your name. Legal fees typically range from $1,500 to $2,500, depending on the complexity of the transaction. Disbursements, such as title insurance and government registration fees, are additional and should also be budgeted for.
Home Inspection
Although optional, a home inspection is a wise investment, especially in competitive markets. Inspections usually cost between $400 and $700 and can reveal necessary information about a property’s condition, helping you make an informed decision or negotiate repairs before closing.
Appraisal Fees
If you’re getting a mortgage, your lender may require a professional appraisal to confirm the property’s value. While some lenders cover this cost, others pass it on to the buyer. Appraisal fees typically range from $300 to $500.
Mortgage Insurance and Application Fees
If your down payment is less than 20%, you’ll be required to purchase mortgage default insurance through CMHC or another provider. The cost is based on the size of your mortgage and is usually added to your loan amount. Some lenders may also charge a mortgage application or processing fee, so it’s worth asking in advance.
Adjustments on Closing
When you take possession of your home, you may need to reimburse the seller for any prepaid expenses such as property taxes, utility bills, or condo fees. These adjustments are calculated by your lawyer and added to your closing costs.
Moving and Setup Costs
Don’t forget the cost of moving your belongings, which can range from a few hundred to several thousand dollars, depending on the distance and volume of items. You’ll also need to budget for setting up utilities, internet, and other services in your new home.
Immediate Repairs and Furnishings
Even move-in-ready homes often require some initial updates or furnishings to make them your own. Whether it’s painting, replacing light fixtures, or purchasing new furniture, these costs can quickly add up after closing.
Plan for a Confident Purchase
Buying a home in Halton is an investment in both your lifestyle and your future. By understanding all the costs involved, you can budget confidently and avoid the stress of unexpected expenses.
At Joette Fielding Real Estate Group, we guide buyers through every step of the process, ensuring they have a clear picture of what to expect financially before making a move. Contact us today to start your home-buying journey with a team that knows the Halton market inside and out.