How much does closing really cost? – The blog of a first time home buyer
This part was probably the biggest shocker to me, the actual cost of buying a home. Spoiler alert, it’s not just the 5% you need for a down-payment! Here how much my house actually ended up costing.
Down payment – $10,000
The down-payment is of course the largest single fee associated with the purchase. This included a $1000 deposit at the time my offer was accepted, with the remaining $9000 due at closing.
Inspection – $0
No, I didn’t get a crazy deal on an inspector, I chose to do my own inspection with a friend whose construction background I trust. The home I bought was five years old, so I made the decision to save myself $500-$700 and not hire an inspector. Full disclosure: I would NOT recommend doing this yourself. A professional can find many potential upcoming issues.
Property Tax – $1040
Yearly property taxes are paid in roughly the middle of the calendar year, and they cover the whole year, so when you buy a home, you need to reimburse the portion of the year that you will own the home.
Here’s the kicker – properties that are not inhabited by their owner in New Brunswick are charged a nearly double tax rate. (NB is the only province that does this) When you buy a home that is being rented (like I did), then you pay back that current rate, and eventually are reimbursed. As of the time of writing, I’m still waiting on a nearly $500 refund.
HST – $0
Only brand new homes are subject to HST, which mine was not. Kind of makes you wonder why you pay HST on a used vehicle…
Land Transfer Tax – $2050
Usually right around 1% of the price of the home. This is the fee to the province to change the property into your name. I don’t claim to understand any more of this, but to me I would argue that this should be a flat fee, but I’m in marketing, not politics.
Default Insurance (CMHC fee) – $0
This fee (4.5% of the mortgage amount in my case) is added on to the mortgage, so no extra fee is paid at closing.
Lawyer – $1350
This fee covers the lawyer who managed the transaction, the title insurance, and several other small things
Home Association – $400 + $47
I purchased a townhouse which has monthly maintenance (snow, lawn, and water) covered by my townhouse’s association. I had to pay a one time $400 contingency fee as well as the rest of the month’s maintenance fee.
NB Power – $138 in transfer fees
Ending my old addresses power and starting the new home’s power cost $120+ tax in fees, in addition to all the regular charge.
New Appliances – $1450 (after I sold my old set)
My home came with a pretty gross washer, so I ordered a new set right away and sold the old pair. I’m not going to add this in the closing cost total since I didn’t technically need to buy this.
Bell – $70
This was the fee to move my internet. I was actually charged about $400, but that’s another rant…
Moving – $120
I tried to keep moving costs as low as possible, so I grabbed a friend, rented a uhaul, had someone deliver pizza and beer (once driving was finished), and did it all myself. As I carried a 60 kg couch up to the 3rd floor I regretted this, but I saved some money, and that’s what counts, right?
So, in total, my closing costs ended up approximately $15,200, or 8.1% of the purchase price, not just the 5% of the down payment. There’s a lot of little things that sneak up on you, so my best recommendation is to avoid stress, don’t try to purchase a home without at least 10% of the purchase price in savings.
Andy Tree is a professional Wedding Photographer, marketing expert, coffee lover, millennial, board game enthusiast, and overall nerd. Over the next weeks he’ll fill you in on every step of his search and first home purchase.
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