Each city in Canada requires different income levels for you to be able to buy a home, be used personally or as an investment.

Why are there hidden costs and what are they?

In home buying, there are some costs that can’t be seen in plain sight. Property hunting can be overwhelming because you’re taking in too much information in order to make an informed decision about landing your ideal investment property or home.

During the home buying process, some costs are usually not presented upfront. Sometimes it’s because they don’t directly concern the seller. Some examples are utility hookups, disbursements and documentation requirements. Other costs are taxes and transfer fees, which depend on where your desired property is located. It’s essential to be aware of these hidden expenditures, to ensure cost-efficiency when it comes to home buying.

When buying a home, you need to prepare for these expenses that you’ll encounter but may not have been explicitly relayed during the home buying process:

Home Inspection Fee

This fee can be an advantage when it comes to landing a good deal for a certain property. To the untrained eye, it’s difficult to see if a house is in good condition. Is the electrical installation safe? Are the heating and air conditioning units ready to be used once you move in? These are some of the concerns often neglected in homeownership. These costly mistakes can easily be solved with a thorough home inspection.

This is a smart move when buying old properties. Hiring a reliable inspector can give you leverage in negotiating for a lower price, in case there are issues. A home inspector’s fee typically starts from $300 and up.

Legal Fees

Property acquisition involves a lot of legal documents, such as the arrangement of purchase and mortgage documents. It’s best to get a lawyer, so you won’t have to arrange it for yourself.

A crucial role that the lawyer or notary public plays is guaranteeing you that there are no other claimants on the property. This can save you thousands of dollars in future legal disputes and of course the headache.

Land Transfer Tax

Almost all cities and provinces in Canada require Land Transfer Tax when buying property. The amount of tax depends on the location of your property. Some locations offer rebates on the initial purchase. The rates for these taxes depend on the amount and value of the property. In Ontario, taxes range from 0.5% to 2.5%. 

Mortgage Default Insurance

If the borrower’s down payment is lower than 20% of the cost of the entire property, this is considered to be a high-ratio mortgage. These types of mortgages require insurance coverage to protect the lender from any default payments on the loan. 

Following the loan-to-value rule, the higher your down payment – in relation to the cost of the home you are buying – the lower the mortgage insurance cost.

Utilities and Property Taxes

Two other hidden costs in home buying are utilities and property taxes. These occur when the previous homeowner has already paid for any of these taxes beyond their occupancy period. This entails reimbursement of expenses paid in advance, but no longer consumed since they have already vacated their home.

Moving Cost

Some home buyers fail to estimate the entirety of the cost they’ll incur to move. This is not necessarily a hidden cost since those who plan to buy a home or want to transfer to a new location know that there are costs related to moving from their old home to their new one.

How can a broker help to reduce some of these fees? 

All house hunters look for ways to reduce costs. It’s a common misconception for home buyers to decide not to work with a mortgage broker thinking that they can achieve their desired results by themselves. 

In this stage of the home buying process, getting the services of a reliable and experienced mortgage broker will provide guidance and advice to help with better decision-making.

For starters, mortgage brokers will help save you the time and effort when it comes to doing the legwork. You can rely on them to submit all documents and paperwork on your behalf. This is especially helpful for people who are extremely busy and need someone knowledgeable in the industry, who knows the ins and outs of the process.

Indeed, mortgage brokers are very well-connected in the industry. They can help find better deals and help get some fees reduced to your advantage.

Get help from a trusted mortgage broker

A mortgage broker gives you better access to some of the best deals offered by various lenders. They help arrive at the best, most informed decisions, so you can choose your ideal home or property of choice.

Homeownership can be challenging especially in the home buying stage. Talk to our brokers at Daisy Raouph Mortgage Financing Solutions to get to know more about the services we offer. Our reliable brokers can help you through every stage of the process of homeownership.


Daisy Raouph, CLU, CHS, specializes in mortgage financing solutions and financial services. A Mortgage Broker and Financial Security Advisor with over 30 years of experience in financial services. Contact us today to review your mortgage financing options. We can help!