The Costs Of Homeownership In Ontario
It’s an exciting time when you decide to buy a home. With the excitement also comes the challenge of planning your budget and trying to determine costs. How much of a purchase price can you afford? How much of a mortgage can you carry? Can you afford the monthly and emergency costs that come with home ownership?
Filice Law wants to help you determine whether you can afford to buy a home and how you should budget for it.
What Are The Costs Of Buying A Home?
The price of a house or condominium is just one of many costs you need to consider when determining a budget for your purchase. Often individuals are not buying their homes outright, but they put down a down payment and arrange for a mortgage. In that case, the cost for buying your home is the down payment and the cost of financing.
You should be aware that there are additional expenses that must be included in the overall budget. Additional costs include:
- Provincial and municipal land transfer taxes
- Monthly mortgage payments
- Interest adjustment costs
- Monthly condominium fees, if applicable
- Property taxes
- Home inspection fees
- Moving costs
- Hydro, heat, water expenses
- Mortgage insurance
- Title insurance
- Home insurance
- Legal fees
Can You Afford A Home?
When determining what is affordable, you must consider your current financial situation. That means you have to determine your income and savings. To do that, you have to look at your financial situation by subtracting your debts and current household expenses from your income. Debts include anything from credit cards to car loans and lines of credit.
It is important to include household expenses as part of the amount you subtract from income, as that is your cost of day to day living. Those expenses include items such as groceries, clothing, housing, travel and entertainment.
If you have money left after subtracting all your debts and expenses, you may be ready to own a home. It is often advisable to speak to a professional when trying to determine whether you can afford a home and how to set up your homeowner budget.