Moving out on your own is fun and exciting. You get to go out and come home whenever you want, eat and drink whatever you want. You have a place to call your own, your kingdom, and fortress. At the same time it can be very stressful. All of a sudden there’s a mortgage and… you guessed it, bills. After all, being a responsible adult is apart of growing up. Here are the first time home buyers expenses list we’ve came up with:
Your home will probably be the biggest investment of your life. Talk to your mortgage broker and financial planner to come up with a comfortable pre-approval amount when buying your home. You can choose between different interest rates such as fixed and variable, as well as your amortization period.
Condo fees (if your buying a condo)
These fees are what it costs to maintain the building, for example, mowing the grass, plowing the snow and vacuuming the hallway carpets. If you buy a house, you either have to do these things yourself, or hire someone else to do these things for you.
These are fees to process the legal documents needed when buying your home. Expect to pay anywhere from $1000-$2000 depending which notary firm you go to. Notaries can be quite expensive for some legal documents saying that you own a property, shop around for the cheapest rate.
Some places require a welcome tax. Expect the welcome tax to give you a big welcome to your new home. You’ll get the welcome bill in the mail a few months after you move in. Cost depends on the purchase price of your home.
City and school taxes
These taxes really depend on which city you live in and the evaluation of your home. For an estimate, contact your city hall.
The united states has private mortgage insurance (PMI), while canada has the canadian mortgage and housing corporation. Both types of mortgage insurance is mandatory if your downpayment is less than 20% of your home. Cost depends on the percentage down and the total price of your home. On top of mortgage insurance, you have to pay taxes on it as well.
Insuring your home in case of theft or property damage is mandatory. It’s also a good idea because you’re protect your home and most belongings.
Furnishing your house could be pricey if you’re buying everything new. You may need to furnish your new home with appliances, a home theater, bedroom sets, and couches. Cut costs by buying second hand from sites like craigslist and kijiji or hand-me downs from family and friends.
If you’ve just purchased a house parking will be free. Having moved into a condo means buying the space for parking and paying condo fees to maintain that parking space. If you didn’t purchase a space, you may be renting one.
Utilities: electricity and water
You may be more conscious of how much electricity and water you’re using now that you’re pay for it.
Utilities: cable, internet and phone
Cable television, internet, and telephones or cell phones aren’t mandatory but who doesn’t want to live without all three or four.
If your on a tight budget, you’ll probably lose weight. Groceries are expensive so cut down on eating out by eating in and you’ll save a lot of money.
Optional: mortgage life insurance
This type of insurance is optional when you buy your home. It’s an insurance you pay incase you or your co-owner (spouse) pass away, your mortgage is paid off in full.
Optional: life insurance
This is optional as well. This type of insurance is more common than mortgage insurance. You can choose how much you want to be covered. Based on a lot of factors including medical history and lifestyle habits, your premium will be adjusted accordingly.
Optional: money borrowed from RRSP’s
If you’ve borrowed money from you’re Registered Retirement Savings Plan (RRSP)to help pay for your downpayment, you have 15 years to pay it back. The easiest way to do this is to divide the total amount you’ve borrowed by 15 years. Contribute this amount back to your RRSP’s every year and plug it in your taxes.