Expenses when buying a property

Are you thinking of getting started with the purchase of a property? Do not forget to anticipate additional expenses! Indeed, the budget for the acquisition of a home represents more than the price of the property itself. It is necessary to provide at least between 2% and 3% of the value of the latter to be able to buy it in peace. This is why it is essential to be attentive to the various costs allocated to its acquisition to avoid unpleasant surprises. In this article, I have gathered all the expenses to plan for before buying a property.


Mortgage Loan Insurance

If your down payment does not exceed 20% of the purchase price, you will have to take out mortgage loan insurance. The latter protects you if you are unable to pay the monthly payments on your mortgage and it prevents you from having your home seized. The cost of mortgage loan insurance is influenced by different criteria: your personal and professional situation, your credit history, but also your down payment (the higher the latter, the less expensive your mortgage loan insurance will be).


Assessment Fees

You have the possibility of having the property you are interested in apprised to be sure of paying the right price for it. It even sometimes happens that your financial institution requires you to do so before letting you benefit from a mortgage loan. A certified appraiser will therefore come on site to ensure that the price claimed by the seller is in line with those of the current real estate market. The cost of an appraiser will generally vary between $500 and $800. It is normally paid for by the financial institution when it decides to use it.


Inspection Fees

It is often recommended to seek the services of a home inspector before making any purchase. This will allow you to avoid any unpleasant surprises. Indeed, the inspector will be able to identify the expenses to be expected for future renovations or repairs.


Notary Fees

It is strongly advised to turn to a notary to avoid unforeseen events, both administrative and financial, when buying a property. This is even mandatory when signing a mortgage. The notary plays an important role during the real estate transaction since he must ensure that it takes place in compliance with the laws. He also has the task of preparing certain documents such as the deed of sale, the mortgage deed, and the registration of the dwelling in the Land Register of Quebec. The fees of a notary are generally between $800 and $1600.


The Various Taxes Related to the Acquisition

When buying your new home, you will have to pay certain taxes. First, there is the welcome tax, also called real estate transfer tax, which must be paid to the municipality. There are also municipal and school taxes that must be paid every year. They generally vary according to the value of the real estate of the municipality. Finally, there is the Quebec sales tax (QST) and the goods and services tax (GST), which only concern new properties and properties owned by businesses. These taxes represent approximately 15% of the total price of the property (QST + GST).


Condominium Fees

Should you acquire a condo, you will have to pay condominium fees. They represent expenses relating to the maintenance, upkeep, and handling of common areas. Some of them may even concern a limited number of co-owners depending on the use they have of these parts.


Small and Big Projects

It happens that some properties, even the most recent ones, require certain renovations such as refreshing the walls or replacing the roof. We must therefore not forget to consider the unforeseen that the purchase of a property may represent.


You want to buy a property and you need help to see more clearly about the costs that this can generate? Do not hesitate to contact me, we can study your project together and I will be happy to advise you as best as possible.

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