Let’s Learn About Budgeting
There is a lot to consider when budgeting for your adventure in real estate. Let’s learn how
Budget For Buying
Buying a home is likely the largest single investment of your life. Making sure you’re financially set-up for success is imperative. Here are some factors to consider when making your budget as a buyer. Keep in mind that this is not an exhaustive list;
Mortgage affordability (Purchase Price)
Down Payment
Mortgage Insurance
Home Inspection
Appraisal Fee’s
Renovations or required improvements
Moving Costs
Closing Costs (for buyers)
Lawyers Fees; can include costs from the Statement of Adjustments upon closing
Applicable Tax on Mortgage Insurance
Title Insurance
Land Transfer Tax
Sometimes qualifying for a mortgage isn’t an issue, but your monthly affordability is a limiting factor. Take into consideration your monthly expenses to see how much you can actually afford to spend on a mortgage payment.
Use the following list to help make a monthly budget;
Mortgage Payment (can be monthly or biweekly)
Property taxes
Homes Utilities (heat, hydro, water)
Property maintenance (snow removal)
Home Insurance
Condo Fee’s (if applicable)
Personal Debt repayments; loan, credit card, etc.
Car Payment; including insurance & maintenance
Cell Phone; including Cloud storage fees
Home internet and/or TV; include subscriptions (example; Netflix, Spotify, Apple TV, etc.)
Household Expenses; groceries, childcare, etc.
Entertainment Expenses; dining, travel, etc.
Remember, this is not an exhaustive list. Homeownership comes with both expected and unexpected costs. I suggest completing this Household Budget Worksheet from the CHMC to help you plan out your budget. A further breakdown of costs can be found here.
Some of these costs can be rolled into your mortgage, and some require cash upfront. Every real estate transaction is unique and your REALTOR® will be able to answer questions regarding your specific circumstance and help guide you towards achieving your goals.
Budget Calculators
Now that you have a better idea of what goes into a budget, check out these awesome budget makers. I’d suggest starting with the first to create a general budget. Then use the second and third to compare affordability and mortgage calculations.
This budget planner from the Financial Consumer Agency of Canada is AMAZING, I highly recommend!
These calculators from the CMHC will help you gain a better understanding of your financial readiness.
This mortgage calculator from Realor.ca allows you to compare multiple scenarios, super handy!
Budget For Selling
There are endless reasons to sell your home. Regardless of your motivation to sell, making sure you’re financially set-up for success is essential. Here are some factors to consider when making a budget to sell your home.
Upgrades or required improvements
Pre-listing Home Inspection
Professional Specialty Inspections; well, septic system, fuel tank, WETT, etc..
Staging Costs; cleaning services, storage rental, painting, etc.
Moving Costs
Closing Costs (for sellers)
Sale Commission
Lawyers Fees; including costs from the Statement of Adjustments
Mortgage Discharge Fees
Capital Gains Tax
Click here for more information on the costs associated with Selling Your Home.
Keep in mind that this is not an exhaustive list - selling your home is a journey and unexpected costs should be expected. Every real estate transaction is unique. Your REALTOR® will be able to answer questions regarding your specific circumstance and help guide you towards achieving your goals. Remember, your accountant and lawyer are part of your team as well; when in doubt ask them!
Not sure what these terms mean?
Check out my glossary for explanations and further resources.
