Additional Buying Costs
In addition to the purchase price of your home, you need to be aware of and budget for other costs associated with homeownership.
These potential costs include:
- Mortgage Insurance: If your down payment is less than 20% of the purchase price, then you’ll have to purchase mortgage insurance. The cost of this insurance is based on a small percentage of the mortgage amount and is added to the mortgage principal. For more information on mortgage insurance click here.
- Mortgage Life Insurance: Usually offered by your lender and can be added to your monthly payments. This insurance pays off the balance owing on your mortgage if you or your co-borrower dies. If considering mortgage life insurance, also speak to your insurance agent about similar products they might offer.
- Property Insurance: Mortgage lenders require that you carry fire and extended coverage insurance that sufficiently covers the replacement value of your home. You may also want to investigate liability insurance as well. Speak to your insurance agent about the different types of coverage. If you have other policies, such as car insurance, you may be able to negotiate a package discount.
- Title Insurance: Covers among other things, defects in title such as errors and omissions in the public registry, errors in existing surveys and fraudulently discharged mortgages. Title insurance also offers protection if you can’t obtain an up to date survey or certificates from various authorities. The cost for title insurance is usually a few hundred dollars depending on the type of property.