No matter the size, buying a home is a big expenditure. The down payment, realtor’s fees, property taxes, and mortgage payments are probably in the forefront of your mind as you complete the deal.
However, there are many other and less obvious costs that you should be aware of too. Some of these costs are fees and bills that are still easy to predict and budget for:
- Land transfer taxes – Many provinces have some kind of land transfer tax. In Ontario, there are more taxes applied the higher the value of the house.
- Home Insurance – You will need this insurance in case something happens to the house. If it is destroyed, the lender receives the payment from the insurer.
- Utility hook-up fees – You will need to pay to get things like water, gas, and electricity connected and turned on.
- Property survey – This is a good idea to make sure all parties know the exact boundaries and features of the property.
Some expenses can surprise you out of nowhere! Hidden maintenance issues can be a pain in the back when they come as a surprise. Therefore, anticipate them ahead of time and you can save a lot of headaches later. Some important areas and issues to pay attention to include:
- Electrical wiring – faulty wiring can be dangerous, so it’s important to get it repaired.
- Mould and mildew – Areas with lots of humidity but poor ventilation are prone to mould.
- Plumbing – A burst pipe can wreak havoc on your home and cause costly water damage.
- Insulation – If you’ve only seen the house when the weather is pleasant, you might not know how hot or cold it will get in other seasons. High energy bills due to poor insulation can really make a long term impact on your finances.
- Flooding – Is the basement protected from flooding in case of a heavy rainstorm?
- Tree branches – Large tree branches that hang over your house can cause damage if they come down in a storm.
- Foundation repairs – The foundation could require structural maintenance.
- Roof Leaks – This is another common source of water damage in homes.
Keep these maintenance costs in mind when budgeting for your various expenses. This means leaving ample room in your budget after fixed and other mortgage payments, bills, food, etc.
Your insurer may require a thorough inspection of the house ahead of time. Even if they don’t require it, you should definitely elect to do it anyway. Inspecting all the elements will help you more accurately estimate what your repair and maintenance costs will be. Bear in mind that some things can pop up later that weren’t apparent on your first inspections. For example, a big storm could bring flooding or a pipe that looked fine earlier, could suddenly burst.
Start getting things fixed as soon as you can. It’s a bitter pill to swallow to suddenly start spending on repairs as soon as you buy the house, but your bank account will thank you in the long run! It’s cheaper to fix things when they’re small than it is later on. As they say, an ounce of prevention is worth a pound of cure.