Shopping for a new home is fun! But take a look past the sticker price to learn what other costs to include in your budget. Some are one-time or transaction expenses, some are an investment or upgrade and others are incremental to your existing bills. It’s a good idea to do a little research to understand which ones may apply to you.

Transaction costs may include application or appraisal fees, taxes (property purchase tax, GST), legal, moving and utility hook-up fees. You may also have to pay some extra rent, property taxes and partial interest costs and monthly maintenance fees. There are not necessarily large amounts but they certainly add up to a chunk of money when you’re already writing the biggest cheque in your life. If you don’t have the money set aside, it either comes from your down payment or must be borrowed (not advisable!).

Additional costs to your monthly budget may include higher utility costs, monthly maintenance fees, property taxes and home insurance.

Most of us don’t find a home that checks all the boxes but with all the home improvement shows on TV, you may have lots of creative ideas. Whether your ideas are low cost and big impact or costly improvements, don’t forget to set aside some money for this too.

Now that you’ve got a whole lot more information, we can take the numbers from the last three posts and boil them down to some key points:

• Know what mortgage payment you can afford.
• Make sure your budget can handle this payment plus any additional expenses such as property taxes, insurance and higher utilities.
• Have enough set aside to cover the transaction costs to buy your new home.
• Save as big of a down payment as you can (in addition to enough for the transaction costs)!
• Your down payment + the mortgage you can afford = Purchase Price