The Costs of Buying a Home

Buying a home these days requires that people exam the overall costs thoroughly prior to making an attempt to purchase a home. The first requirement is that you must have reliable and secure employment. Mortgage lenders and banks will not consider you eligible for a mortgage without this basic requirement.
Mortgage companies and banks will want to be reassured that you have the money to make the ongoing payments on a monthly and consistent basis. In addition there are a number of other financial requirements that must be addressed, things like; initial deposits, property taxes, insurance costs, and the occasional emergencies like the cost of roofing, purchasing a new appliance or furnace, etc.

In terms of actual cash the first requirement will be an initial deposit. This is an amount of money which you deposit with the selling Realtor in trust to show your good faith in presenting an offer. Such deposits vary given the amount of the sale price, the state of the market, or the desire of the seller. At the present time a deposit of $1,000.00 to $20,000.00 on a home is the range of practice. Keep in mind that the amount of the initial deposit indicates the seriousness of your offer. The higher the initial deposit the stronger the offer.
This initial deposit must not be confused with the down payment, which is the amount of money required to allow the buyer to purchase a mortgage. This down payment does however include the value of the initial deposit.
The second concern is the percentage of the down payment in relation to the cost of the home. By law, in Canada a buyer must put down a minimum of 5% od the full cost of the home. In addition the buyer must buy mortgage insurance unless the buyer increases his/her down payment to 20% or more of the purchase price of the home. This mortgage insurance will increase the cost of the home by 1-3% over the life of the mortgage.
The final cost of a home purchase will include the lawyer’s fee, property tax adjustments, pre paid utilities , if any and any other fees as outlined in the purchase agreement.If you are able to finance these initial and ongoing costs and if you can be preapproved to purchase a home by a mortgage company or a bank then you are ready to seek the assistance of a Realtor to assist you in buying that dream home you have been thinking about.