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Financial Planning: Budgeting for Your New Home and Unexpected Costs

General Isabel Medina Acosta 1 Nov

When it comes to buying your first home, financial planning is crucial. Not only do you need to consider the cost of the house itself, but also the additional expenses that come with homeownership. To avoid any financial surprises, it’s important to create a budget that accounts for all of these costs that are between 2% to 5% of the market value of the property.

Start by assessing your current financial situation and determining how much you can comfortably afford to spend on a house. This will help you set a realistic budget and avoid getting in over your head. Remember to consider not just the monthly mortgage payments, but also other ongoing costs like strata fees,  utilities and maintenance.

It’s also important to plan for unexpected expenses. Owning a home comes with unexpected surprises, such as repairs or renovations. By setting aside a portion of your budget for these unforeseen costs, you can ensure you’re prepared for any financial curveballs that come your way.

These are some of the additional costs involved when buying a house in BC:

1. Property taxes:
2. Transfer taxes:

PTT is calculated based on the property’s fair market value:

  • 1% on the first $200,000
  • 2% on on the portion between $200,000 to $2 million
  • 3% on the portion over $2 million
  • An additional 2% PTT applies to the amount over $3 million.
    *First-time homebuyers may qualify for PTT relief on homes up to $500,000.

3. Title Insurances: $250 to $500
4. Mortgage Insurance: 0.6% to 6.3% on the loan if downpayment is lower than 20%.
5. Appraissals: $300 to $500
6. Home inspections: $350 to $800
7. Conveyancing (legal) fees: $1,000 to $3,000
8. Loan fees: $750 to $1,000
9. Adjustments: $500 to $1,000
10. GST: 5% for new properties

Finally, consider working with a financial and mortgage advisor who can help you create a comprehensive budget and provide guidance on managing your finances. They can help you prioritize your expenses, save for your down payment, and set realistic goals for your homeownership journey.

Isabel Medina- Mortgage Broker Dominion Lending Group
Mobile: 778 513 0169
Email: isabel.medina@dominionlending.ca

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