Buying a property takes more than assembling a down payment. Several expenses arise before, during and after the notarial closing, so planning ahead helps preserve essential cash reserves.
Key takeaways
- The minimum depends in part on the price and financing.
- Inspection costs vary with the property’s type, age and size.
- The municipality generally sends the land transfer duty bill after the purchase.
Down payment and financing
The minimum depends in part on the price and financing. A down payment below 20% generally requires mortgage loan insurance. Its premium is often added to the loan, while certain taxes may be payable at closing.
The lender may also require an appraisal. If the appraised value is below the purchase price, financing or required cash may change.
Inspection, expert reports and notary
Inspection costs vary with the property’s type, age and size. Specialized reviews involving structure, drainage, pyrite or another concern may add to the budget.
The notary’s invoice may include professional fees, searches, registration and administrative expenses. A file-specific estimate is more reliable than a generic amount.
Transfer duty and adjustments
The municipality generally sends the land transfer duty bill after the purchase. The calculation depends on the taxable basis and the municipality’s applicable rates.
At closing, municipal and school taxes already paid by the seller are apportioned according to the sale date. Other property-specific adjustments may increase the cash required.
Keep a reserve after closing
Home insurance, moving, utility connections, locks and initial purchases add up quickly. A reserve also helps cover an urgent repair or seasonal maintenance.
There is no universal percentage. Build an itemized estimate with the lender, notary, insurer and relevant professionals, then add a safety margin.