Expenses associated with the purchase of a home

A first-time home buyer usually thinks more about the big purchase and almost never about the recurring expenses. The truth is that there are many different small and big expenses that you need to be aware of.

Fixed and recurring expenses associated wit the purchase of a home

You may have your eyes on the cost of the big splurge but beside the actual cost of the house, you have to set money aside for closing the deal. This cost varies widely across jurisdictions and are usually between 3-5% of the price of the property you have purchased.

The visible and upfront costs

Down Payment: The most important and easily remembered part is the down payment. This is the actual money you need to pay at the time of purchase to complete your purchase. There is a minimum you have to pay depending on the lender but the upper limit is completely up to you. The more the better.

Fee for Property appraisal: This is the fee you pay to have the property appraised.

Home Inspection: The fee paid to a professional home inspector that provides you with the report on the condition of the house.

Legal expenses: This is the fee(s) you pay for title insurance, registration of deeds/mortgage and/or land.

Tax paid on Land Transfer: The fee paid to municipalities and is usually a fixed percentage of the cost of the property at the time of closing.

Miscellaneous costs: Such as fees paid on mortgage interest adjustment, utilities, property taxes, moving etc.