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You might think your home-purchase budget should be the same amount as your pre-approval, but before you start looking for homes in that price range, consider adding up all the costs involved in a home purchase. After all, your mortgage isn’t the only expense you’ll have.


Keep in mind fixed costs, like closing fees which tend to amount to about two to five per cent of the cost of your home. Closing costs can include home inspections, appraisals, notary fees, land-transfer taxes and mortgage default or Canada Mortgage and Housing Corporation (CMHC) insurance.


Home insurance, property taxes, and condo fees should be considered depending on the type of property you’re looking to buy.


Adding all these fixed cost to your budget, you might decide to borrow less than you qualified for in order to have more room in your budget. In addition to these fixed costs, consider variable expenses — like moving costs if your friends won’t move your stuff in exchange for beer and pizza, the cost of new furniture, and any renovations you’re looking to do. Some of these expenses can come later on — unless you don’t think you’ll be able to stand that peeling linoleum flooring in the bathroom for months or years. Will the roof need to be replaced soon? What are things that might translate into big costs down the road?


Taking on a mortgage is a big commitment. If you’re buying a home with a partner, you may need both of your incomes to pay the bills. But if something happens and one of you can’t work, you might be unable to pay your mortgage.


There are ways to help protect your family and home:

  • Start an emergency fund to cover your expenses for three to six months.

  • Consider a side-hustle to help cover expenses (any type of employment undertaken in addition to one's full-time job).

  • Protect your home in case of theft, fire, or other damage with homeowners insurance.

  • Insure your mortgage in case the unexpected occurs, with Life coverage, Life & Disability coverage, or Life & Critical Illness coverage.

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