You've saved your down payment.

Excellent.

Now let's talk about the other money.

One of the biggest surprises for first-time buyers is discovering that buying a home comes with expenses beyond the down payment and monthly mortgage payment.

None of this means buying a home is a bad idea. It simply means your budget should include the whole purchase, not just the part that gets most of the attention.

Your Deposit and Down Payment Aren't Necessarily the Same Thing

This causes confusion for many first-time buyers.

The deposit is submitted in connection with your Agreement of Purchase and Sale and ultimately forms part of the money you contribute toward the purchase.

Your total down payment may be considerably larger.

Understanding when funds are required is important because real estate transactions involve actual deadlines, not "I'll transfer it sometime next week" deadlines.

Legal Fees

You'll need a real estate lawyer to complete your purchase.

Ask for an estimate ahead of time and find out what is included so you can incorporate the expected legal costs and disbursements into your budget.

Land Transfer Tax

Ontario buyers may have land transfer tax payable on their purchase.

Eligible first-time buyers may qualify for available rebates, but you should still understand how the calculation applies to your specific purchase rather than assuming there will be no cost.

Adjustments on Closing

Your lawyer may also calculate adjustments for expenses the seller has already paid.

For example, if property taxes have been paid beyond the closing date, your portion may be adjusted on closing.

Moving Costs

Even the DIY version of moving costs money.

Truck rental. Boxes. Packing materials. Pizza for everyone who was foolish enough to answer your text that morning.

If you're hiring professional movers, get quotes early.

Insurance

You'll need to arrange appropriate home insurance, and your lender will typically require confirmation of coverage before advancing mortgage funds.

Don't leave this until the night before closing.

Utility and Service Costs

Depending on the property, you may have costs associated with setting up or transferring utilities and services.

Once you own the home, you'll also need room in your monthly budget for electricity, gas, water, internet and other household expenses applicable to the property.

Immediate Home Expenses

Here's the sneaky category.

You move in and suddenly discover you need:

• curtains

• garbage cans

• a lawn mower

• a ladder

• shelving

• snow shovels

• basic tools

• approximately 47 other things nobody mentioned

You don't need to buy everything on Day One.

But having a small post-closing cushion makes those first few months much more comfortable.

Condo Buyers Have Another Number to Consider

If you're buying a condominium, monthly condominium fees become part of your ongoing housing costs.

You should also understand what those fees include, review the status certificate and consider how the condo's financial position may affect you as an owner.

The Goal Isn't to Scare You

It's actually the opposite.

Buying your first home feels much less intimidating when you know what to expect.

Before we start touring homes, I want my buyers to understand their realistic purchasing budget, expected closing costs and what homeownership may look like after they get the keys.

Because qualifying to buy a home and being comfortable owning that home are two different things.

And we're aiming for both.

Charlotte Ferguson, REALTOR®
Finding Home With Charlotte