Surprises aren’t always fun – some leave you wishing they never came. This is especially true for the ones that leave you reaching deep into your pockets. Imagine getting such a costly surprise when buying your dream home – the perfect house for sale in Brampton you finally found after months of hunting. Not the kind of surprise you would want, right?
Unfortunately, there are a lot of expenses involved in home-buying that buyers don’t find out about until it’s too late. But don’t worry; we will help you dodge this unpleasant surprise. Below, we have a breakdown of the lesser-known home-buying expenses to help you stay prepared. Trust us, there are a lot of expenses in this list you might not know about.
Hidden Expenses Involved in Homebuying in Brampton
➔ PRE-PURCHASE AND MORTGAGE-RELATED COSTS
1. Home Inspection Fee
What Is It: A home inspection is a must to ensure the house for sale in Brampton you are buying is in good shape.
How Much to Budget: Home inspection fees typically range from $300 to $600 depending on the size and age of the property.
2. Appraisal Fee
What Is It: The appraisal process gives an unbiased estimate of the property’s market value, protecting the lender (and you) from overpaying.
How Much to Budget: Expect to pay between $300 and $1000 in appraisal in Brampton.
3. Mortgage Default Insurance
What Is It: If you are putting down less than 20% down payment for the home, you will need mortgage default insurance. This insurance protects the lender if you can’t make your payments.
How Much to Budget: The premium ranges from 2.8% to 4% of the mortgage amount.
4. Mortgage Broker Fees
What Is It: Some mortgage brokers get paid by the lender but others charge a direct fee to borrowers. This is especially true if you are working with a private lender or have a complicated financial situation.
How Much to Budget: Broker fees can be somewhere around 1% of the mortgage amount.
5. Interest Rate Hold Fee
What Is It: You can lock in a low interest rate while you shop for a home. Some lenders charge a fee for this service especially if the rate is held for a longer time.
How Much to Budget: This isn’t always charged but if it is, it is around 0.25 to 0.50% of the total loan.
6. Property Survey Fee
What Is It: A property survey confirms the property’s boundaries and ensures there are no encroachments from neighbouring properties. The lender often requires this step to ensure there are no disputes over the property lines.
How Much to Budget: A property survey in Brampton usually costs between $1500 and $6000 depending on the property size.
➔ CLOSING DAY AND LEGAL COSTS
1. Land Transfer Tax
What Is It: In Ontario, buyers must pay a land transfer tax when they buy a property. The amount of the land transfer will depend on the purchase price of the house in Brampton.
How Much to Budget: For houses for sale in Brampton priced at $1,000,000, expect to pay around $16,475 on land transfer tax.
2. Title Insurance
What Is It: Title insurance protects you from issues like title fraud, zoning errors, or property boundary disputes. It is a one-time cost but it provides coverage for as long as you own the property.
How Much to Budget: Title insurance typically costs between $250 and $500 in Brampton.
3. Legal Disbursements
What Is It: On top of your lawyer fees, you will need to cover legal disbursements. These are the out-of-pocket expenses your lawyer pays on your behalf such as title searches and registration fees.
How Much to Budget: Legal disbursements usually add up to $300 to $500.
4. Property Tax Adjustments
What Is It: If the seller has prepaid property taxes, you will need to reimburse them for the portion that applies after your closing date. Your lawyer will calculate the adjustment during the closing process.
How Much to Budget: The exact amount can vary depending on the property and the closing date. It is best to set aside an extra $1000 to $2000, just in case.
➔ MOVING COSTS
1. Professional Cleaning
What Is It: It is always nice to start fresh in your new home even if the previous owners cleaned up. Hiring a professional cleaning service can ensure every nook and corner of your new home is spotless.
How Much to Budget: Cleaning services for a standard three-bedroom house in Brampton can cost between $200 and $400. Expect to pay more if you need a deep clean.
2. Temporary Storage
What Is It: If your moving dates don’t align perfectly, you might need to temporarily store your belongings for a few days or even weeks. This is highly possible if you are selling one home and buying another.
How Much to Budget: Storage units cost between $100 and $300 per month, depending on the size and location.
3. Movers or DIY Truck Rental
What Is It: You have two options for moving your stuff from your old place to the new home – hire professional movers or rent a truck and do it yourself.
How Much to Budget:
Movers – Expect to pay between $100 to $200 per hour for a team of two to three movers.
Truck Rental – The truck would cost you around $150 to $300 per day.
Keep in mind that you will also need moving supplies like boxes, packing tape, and bubble wrap. These extras can add up to $100 to $300.
➔ IMMEDIATE POST-MOVE EXPENSES
1. Lock Changes
What Is It: For security reasons, it is smart to change the locks as soon as you move in.
How Much to Budget: Locksmith services can range from $100 to $300 depending on the number of locks.
2. Utility Hookup Fees
What Is It: Connecting utilities like electricity, gas, water, and the internet often involves setup fees. Some providers may even require a deposit if you are a new customer.
How Much to Budget: Expect to pay around $50 to $150 per utility for setup fees.
3. Minor Repairs and Maintenance
What Is It: Even a well-maintained home will need some minor repairs or updates after you move in.
How Much to Budget: Set aside at least $1000 to $2000 for repairs and maintenance.
Make Sure Your Wallet Can Handle All These Expenses and Still Have Some Breathing Room
As you have seen, there are many hidden expenses involved in home buying – some big, some small. While you can cut back on a few expenses, you cannot avoid all of them. For example, you can skip hiring professional cleaners or borrow a truck from a friend instead of renting one. But you can’t skip paying for legal fees, land transfer tax, or a home appraisal. These are necessary home-buying costs you just have to budget for. That’s why you should plan for every possible expense even the ones you hope to avoid. It’s always better to have some extra money set aside than to come up short at the last minute.
After all, surprises are great when it comes to housewarming gifts but not when it comes to unexpected homebuying expenses.
