So, you’ve decided it’s time to step beyond renting and purchase a condo of your own. As you plan your home-buying journey, it’s not just about the mortgage, there are other costs that come with owning a condo. Let’s dive into the other expenses you need to know, so you can budget wisely and enjoy your new home stress-free.
Don’t just focus on the mortgage – budget for everything.
First Of All, The Mortgage Payment Of Your Condo
Your mortgage payment is determined by your down payment, purchase price, mortgage rate, and amortization period. A quick rule of thumb is estimating $500 per month for every $100,000 of mortgage, but your actual payment might be less. For instance, a $600,000 mortgage could result in a monthly payment of around $3,000. Use my mortgage calculator to see variations based on different prices or down payments.
Add In Your Maintenance Fees
Your maintenance fees cover shared services like operation and building maintenance, contingency reserve funds, management, and insurance. In Toronto, it’s about $0.75 per square foot. Some condo fees may also include utilities like gas, electricity, and water. Don’t forget to add this to your budget along with your mortgage payment when planning your overall costs.
Yes, There Are Property Taxes
Your property taxes pay for public services and infrastructure in your chosen municipality. As a budgeting example, a $650,000 condo in Barrie would pay taxes around $4,235 annually (based on 2023 rates) but check the real estate listing to be sure. Most banks roll this into your mortgage payment until it’s paid off. This means you won’t really notice it as an extra expense but it does increase your monthly payment beyond your original mortgage payment.
Your Parking And Storage May Cost Extra
If your condo comes with parking, there might be an extra fee. Also, if you have more than one vehicle, that will be additional. If you’re thinking of using your parking space for storage, check the rules first – many condos have rules that don’t allow this. Most condos include a storage area but it’s best to check in case there’s an additional fee – especially if you aren’t able to use your parking space for storage.
You Will Have To Budget For Homeowners Insurance
While maintenance fees typically cover building insurance for common areas, it’s important to have separate insurance for your suite and personal belongings. Budget approximately $75 per month for this essential coverage.
Add Extra To Your Budget For Special Assessments
Unexpected expenses like major repairs can lead to special assessments. While the exact amount is unpredictable, be prepared for potential bills of $10,000 or more. When you’re negotiating the price of your condo, check to be sure there are no special assessments pending or it may be a nasty surprise that could eat up a big chunk of your savings.
Work With A Mortgage Expert, Experienced with Condos
Working with a mortgage broker is like having a condo-buying expert on your side. I will help you understand all the costs, like closing fees and legal expenses, that might catch you by surprise and it’s free to work with me. It’s also smart to chat with your realtor before making an offer on a condo to find out about the maintenance or condo fees for that building. This way, you can plan your monthly budget better. You don’t want to feel house-poor right after you move in because you overlooked the additional costs.
Lastly, Before You Start Hunting For The Perfect Condo, Get Pre-approved For A Mortgage – It’s a Must-do Step
With my experience as a Barrie mortgage broker, I’ll guide you through getting pre-approved and offer helpful financial advice for you along the way. If you’re on the condo hunt, call me at (705) 315-0516, or click this link to set up an online meeting, to chat about your options. Together, we’ll go over your mortgage rates, look at your finances, and make sure you smoothly get into the condo you’ve been dreaming of, with as little stress as possible.