Buying a home involves sneaky hidden costs that are often overlooked. Be prepared for fees that go beyond the mortgage. The time for you to budget for those "end" expenses is now!
Our previous blog post regarding MANDATORY FEES can be found here: Hidden Costs I
Mortgage Application Fee: The fees charged vary from lender to lender. If you're lucky, some don't charge at all.
Mortgage Default Insurance: For buyers with less than a 20% down payment, you are required to buy the default insurance which is calculated as being 0.65% - 2.75% of the mortgage amount. It'll be in your best interest to have at least 20% down in order to save thousands of dollars.
Mortgage Life Insurance: Having mortgage life insurance is a great safeguard that protects you and your family in case of death or illness. Research different term policies to align yourself with a insurance policy that is best suited for all your needs. A quick tidbit: Generally speaking, a term life policy offered from an insurance company is a better deal in contrast to a policy offered from your lender.
Sales Tax: This is applicable to only newly built homes with a rate of 12% HST or 5% GST + 2% transition tax which is dependent on when the construction was completed.
*But wait! You'll get a rebate on your Federal Income Tax if you paid less than $850,000 (HST) or $450,000 (GST) for your newly built home.
Stay tuned for our last post on additional hidden fees of buying a home!