Buying a home can be one of the most exciting and rewarding things you ever do. Vieira Real Estate Associates are here to guide you through the process and make it as smooth and pleasurable as possible. First, determine if you have enough cash on hand to cover the closing costs and expected down payment. In Ontario, the minimum down payment is 5% on insured mortgages and 20% on uninsured mortgages. There are some government programs that you may be able to take advantage of such as using RRSPs for the down payment.
Knowing what costs of homeownership to expect can help you manage your budget and steer clear of financial surprises. Here's a quick rundown of the top ten costs every new homeowner should keep on their radar.
Top Ten Common Costs of Homeownership
1. PROPERTY TAX
Many of the services you’ll enjoy in your new neighbourhood, from parks and recreation facilities to road maintenance and schools, are funded by municipal property taxes. Rates vary widely from region to region and from home to home. Annual taxes can top several thousand dollars in urban centres, so some homeowners opt to pay in installments - your lender may provide an option to combine these with your mortgage payments.
2. ENERGY COSTS
If you’re used to keeping the lights on and the thermostat up because utilities are included in your rent, you’ll now have to pay for these costs. Budget to cover monthly gas, electric, or oil bills, which fluctuate with the seasons. Your real estate agent can ask a home’s seller to confirm past costs.
3. PHONE, CABLE, AND INTERNET SERVICES
The costs of being “connected” can easily add up to a couple of hundred dollars a month. Moving into a new home might be a good time to consider whether you need both a land line and a wireless line, for instance, or if you can bundle services for a discount.
4. HOME INSURANCE
Protect your home, its contents, and your property against damage or liability. Prices can vary, depending on your home and neighbourhood, but plan for costs that typically start at a minimum of $700 per year. Keep in mind that a lower cost policy may not offer the comprehensive coverage you may want. You can keep costs down by choosing a higher deductible.
5. CONDO OR ROAD MAINTENANCE FEES
If you purchase a condominium property there will be monthly maintenance fees that can range from $80 to over $1000 per month. These fees are collected by the property management company and are used for common area maintenance, services (security, cable, etc.) and to build the reserve fund. The reserve fund accumulates and is “reserved” for large capital repairs or purchases by the corporation. Some properties are freehold with a condo road. This means the building is owned and cared for by the owners however the road is private and maintained by the property owners. (We would be happy to explain condo ownership and answer any questions at your convenience.)
6. FUEL OR TRANSIT COSTS
If you’ll be commuting a longer distance to work, consider whether you will face higher fuel or public transit costs or whether you’ll have to pay for parking.
7. MONITORED SECURITY
If you opt for home protection, monitoring can cost anywhere from $20 to $80 or more per month depending on the plan.
8. HOME MAINTENANCE
Plan to cover all the occasional costs to keep your house in working order, such as changing furnace filters, carpet cleaning, clearing your eavestroughs, and touching up interior or exterior paint. You’ll find it easy to spend $100 or more a month on such home maintenance items and services.
9. LANDSCAPING
Many homeowners forget to budget for exterior maintenance costs such as lawn cutting, snow removal, yard cleanups and even gardening. These items can be cost effective if done yourself, however can be costly if contracted out.
10. REPAIRS
These are larger, less frequent expenses like replacing the roof, furnace, air conditioning units, or appliances. Housing experts recommend setting aside 1% of the value of your house each year - a minimum $1,000 for every $100,000.
Bottom Line:
Staying on top of the ongoing costs of owning a home is key to keeping both your property and finances in good shape. From regular maintenance to unexpected repairs, these expenses are part and parcel of the homeownership experience. Plan and budget wisely to make sure you can enjoy your new home without unnecessary financial stress. If you're looking to become a homeowner in Oakville, Burlington, Milton & surrounding areas, reach out to us here.
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