Emphasis here is on your first home because I can safely assume that by the time you buy your second home you will have encountered or become aware of these costs and therefore the costs will no longer be hidden to you and you can prepare for them appropriately.
On the other hand, by hidden costs I don’t mean to suggest some shady or secretive costs that comes with owning your home, but rather Costs that that are not typically obvious in the buying process, but for which you cannot do without (in most cases)
- CMHC fee: This is the Canadian Mortgage and Housing Corporation fee is the Mortgage loan insurance based on the down payment at the time of purchase. If your down payment on a home is less than 20% of the purchase price, a CMHC fee will be applicable.
For example, if the purchase price is $300,000.00, and you have a down payment of 10% ($30,000), your Mortgage Loan insurance will be $8,370.00. This fee is typically deducted from your down payment, and typically not an additional out of pocket cost; which means your actual amount that will go towards your down payment will be $30,000 – $8370.00 = $21,630.
You may however choose to pay this fee as a lump sum amount out of pocket, and separate from your down payment. Visit https://www.cmhc-schl.gc.ca/en/finance-and-investing/mortgage-loan-insurance/mortgage-loan-insurance-homeownership-programs/cmhc-mortgage-loan-insurance-cost for more details
- Closing costs: Closing costs will typically include the real estate agent fees, Lawyer fees, Title search. In Saskatchewan, the buyer’s realtors don’t take a commission from the buyer. However, if you consider that the seller has already factored the realtor commission into their asking price, then essentially you realize that it is the buyer that pays the realtor fees indirectly.
- Inspections: It is advised that after your offer has been accepted on a property, that you get an independent Home inspector to inspect the house thorough in order to identify any hidden damages, required maintenance, and determine the true condition of the house which typically cannot be determined just be walking around the house during the viewings.
- Furnishing; Granted this one is is arguable, as the cost for purchasing the home but if you consider that you do not intend to live in a house with no furnishing like chairs, tables, appliances, decorations, mattress, beds, etc. they you must consider this part of the costs to prepare for.
- Home improvements: Many of us too often find ourselves watching HGTV renovation shows and dream of all the things that you will do when you buy your own house. Well… here is your chance!
But seriously, home owners usually put their own touch on their house whether it be removing walls to make an open concept space, planting a garden, improving your curb appeal, or just scratching a DIY itch; they usually end up spending a little more to make the home theirs.
These are some of the more common costs that are not factored in by first time home buyers; well now you know, so budget accordingly.