Hidden Costs Of Buying A Home

Costs Involved When Buying a Home in London, Ontario

Buying a home is one of the most significant financial decisions you’ll ever make, and understanding all the costs involved is essential to avoid surprises along the way. This blog post discusses the hidden costs of buying a home. While most home buyers focus on the down payment, several additional expenses come with purchasing a property in London, Ontario. Whether you’re a first-time buyer or looking to upgrade, be prepared for the Costs Involved When Buying a Home in London.

Here’s a detailed breakdown of the typical Costs Involved When Buying a Home in London:

1. Down Payment

The most significant upfront cost is your down payment. In Canada, the minimum down payment depends on the purchase price:

• 5% for homes under $500,000
• 5% on the first $500,000 and 10% on the portion between $500,000 and $999,999
• 20% or more for homes priced at $1 million or higher

The more you put down, the lower your mortgage and monthly payments will be. If your down payment is less than 20%, you’ll also need mortgage default insurance (CMHC Insurance).

2. Mortgage Default Insurance (CMHC Insurance)

This cost only applies if your down payment does not exceed 20% of the purchase price. CMHC insurance protects the lender in case of default. The premium is calculated as a percentage of your mortgage amount, typically ranging from 2.8% to 4%, and can either be paid upfront or added to your mortgage.

3. Land Transfer Tax (LTT)

In Ontario, buyers pay Land Transfer Tax (LTT) based on the property’s purchase price. The rates are tiered and can add up quickly. For London home buyers, the provincial Land Transfer Tax is applicable, but there is no municipal LTT like in Toronto.

LTT Example Calculation:

• 0.5% on the first $55,000
• 1% on $55,000 – $250,000
• 1.5% on $250,000 – $400,000
• 2% on $400,000 – $2,000,000
• 2.5% above $2,000,000

First-Time Home Buyer Rebate: Eligible first-time buyers can receive a rebate of up to $4,000 to help offset this cost.

4. Legal Fees and Disbursements

Hiring a real estate lawyer is required to handle the legal aspects of the home purchase. Expect to pay between $1,500 and $2,500 for:

• Title Search
• Registration of the property
• Reviewing the Agreement of Purchase and Sale
• Handling mortgage documents

Lawyers also manage disbursements, including land registry fees, title insurance, and courier costs.

5. Title Insurance

Title insurance protects against potential property title issues, such as fraud, encroachment, or survey errors. Lenders often require it, typically costing $250 to $400 in London, Ontario.

6. Home Inspection Costs

While optional, a professional home inspection is highly recommended to assess the property’s condition and identify potential problems. Expect to pay between $400 and $600 depending on the size and age of the home.

7. Appraisal Fee (If Required by the Lender)

Your mortgage lender may require a professional appraisal to confirm the home’s market value. In London, Ontario, the cost ranges from $350 to $500, though sometimes the lender covers this fee.

8. Property Taxes and Adjustments

At closing, buyers must reimburse the seller for prepaid property taxes or utilities. Your lawyer will calculate these adjustments. London property taxes vary by neighbourhood and home value, so it’s essential to factor in ongoing annual costs.

9. Utility Hook-Up Fees

When you move into your new home, setting up or transferring utilities (hydro, water, gas) may involve hook-up or account setup fees ranging from $50 to $150 per service.

10. Home Insurance

Mortgage lenders require proof of home insurance before closing. Premiums depend on the home’s value, location, and coverage but average between $800 to $1,500 per year in London.

11. Moving Costs

Remember the cost of moving your belongings. Whether hiring professional movers or renting a truck, local moving costs typically range from $1,000 to $2,500, depending on the distance and size of the move.

12. Additional Costs to Consider

• Condo Fees (if applicable): Monthly fees if purchasing a condominium.
• Home Upgrades or Repairs: Immediate renovations, furniture, or appliances.
• Status Certificate (for Condos): A review of condo corporation finances, costing $100 to $150.

Final Thoughts: Costs Involved When Buying a Home in London

Buying a home in London, Ontario is an exciting milestone, but it’s essential to budget beyond the down payment. Understanding all these costs ensures you’re financially prepared and avoids last-minute surprises at closing.

At Elevate Real Estate Group with Royal LePage Triland Realty, we’re here to guide you through every step of the home-buying process. From navigating land transfer taxes to helping you find the right professionals for inspections and legal work, we make sure no detail is overlooked.

Thinking about buying a home in London, Ontario? Reach out today for expert advice and personalized service tailored to your needs.

Why Choose Elevate Real Estate Group?

At Elevate Real Estate Group, we understand that buying a home is a significant decision. That’s why having the right team by your side is essential. Our experienced realtors—Stewart Blair, Jeremy Odland, Brittany Wurfel, and Caitlyn Ford—bring unmatched expertise and dedication to every client.

Additionally, our in-depth knowledge of the London, Ontario, market allows us to confidently guide you through every step of the process. From the initial consultation to the moment you receive your keys, we’re committed to making your journey smooth and stress-free.

Learn more about Elevate here, Meet the Elevate Real Estate Team

Elevated Excellence in Real Estate

When you ask our clients, you’ll hear time and time again how we stand out in a competitive market. Our unwavering focus on Ethical Behaviour, providing the Best Client Experience Possible, and maintaining a Commitment to Excellence sets us apart.

Unlike others in the industry, we do not chase awards, focus on sales volume, or rush through deals to move on to the next client. Instead, we care about Every Client, Every Deal, Every Time. Whether you’re a first-time buyer or a seasoned investor, you can trust us to deliver the care and respect you deserve.

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Contact Us

Do you have questions or need personalized advice? Call us at 519-933-6198. Let’s work together to find the perfect home for you! You can also use the Contact Us page.

More From The Elevate Real Estate Blog

Exploring real estate in London, Ontario? We’ve covered you with various blog posts designed to guide you through every step of the buying or selling journey. Whether you’re considering a move to London, preparing your home for showings, or looking for expert tips on navigating the real estate market, our curated resources are here to help. Dive into the posts below for actionable advice, local insights, and strategies to make your real estate experience seamless and successful. Each blog is tailored to provide you with valuable knowledge to make confident, informed decisions in the London, Ontario, real estate market.

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Your Essential Home Buyers Guide: Top 10 Tips for Buying a Home

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Ontario Real Estate Commissions Uncovered

Understand how much you can expect to pay when buying or selling with our guide to Ontario real estate commissions.

First-Time Home Buyer’s Guide in Ontario

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Meet Jeremy Odland – Real Estate Broker & Founding Partner

Get to know Jeremy Odland, a trusted real estate expert with Elevate Real Estate Group, here.

Meet Stewart Blair – Real Estate Broker & Founding Partner

Discover how Stewart Blair brings dedication and expertise to the Elevate Real Estate Group here.

Meet Brittany Wurfel – Realtor & Founding Partner

Learn about Brittany Wurfel’s commitment to excellence in real estate with Elevate Real Estate Group here.

Meet Victoria Rowe – Client Care Manager

Find out how Victoria Rowe ensures exceptional client experiences at Elevate Real Estate Group here.