Home Ownership Costs

[mjohare]

Am I forgeting any expenses associated with home ownership?

mortgage
property tax
hydro
heat
water/sewer
maintenance
mortage insurance

How much does mortage insurance cost?
How much should I budget for maintenance costs? the places we are looking at are in an old neighbourhood, but lets assume the house has a newer roof and windows.

[eelfliw]

Don't forget :

- home insurance
- gardener (even better if gardener plows the driveway in winter)
- cleaner
- telephone
- cable/satellite TV
- internet

There's no condo fee unless the house is part of a condo corp.

How old is the house? If really old (build before 1950s), you'll have to spend $$$ ripping out old wires and replacing electrical panel if it isn't already done. The water pipes may need replacing if it's made of lead or galvanized steel. Bsmt may have leaks. Insulation may contain asbestos & UFFI. Home insulation may not be adequate.

[Spidey]

are we talking home or condo. There are many more things involved with house ownership than condo ornewship

[notanexpert]

Mortgage insurance from the bank is usually overpriced. I pass on that and just rely on my personal life and disability insurance to bail me out in case of trouble. You get some insurance usually with your job, if you think that may be insufficient in some circumstances, shop around for more. I personally have a life insurance policy in addition to my job benefits to take care of my mortgage and my family in case I kick the bucket in an untimely fashion.

As for maintenace, much of it is really up to you. Lots of things can be deferred if you happen to be short of funds, or you can spend a lot in a year if you have the funds available and think that catching up on maintenance may be a wise thing to do at the time. I have an old house and spend almost nothing one year, and $6000 to rebuild the front porch and the back deck the next year, so its hard to say there is a fixed amount you need to spend. Some expensive things will need replacement over time, i.e. furnace roughly every 25 years, roof (if conventional) every 15-25 years, etc., so you can just budget for those big items, and always have to have a cushion for smaller items that can't wait.
m

[mjohare]

are we talking home or condo. There are many more things involved with house ownership than condo ornewship

Home. Almost definately.

[Spidey]

Home. Almost definately.

Maintenance and upkeep is something you should factor in. Im not talking renos, just things that break here and there you use all the time. With a house it seems theres always something.

Up keep of the outside. Extra water for the lawn, things like that

[bionicbadger]

Also factor in tools and stuff you need for around the house.

Drain Snake & Plunger
Lawnmower
Snowblower/shovel
garden tools (rake/shovel etc.)
Garbage cans
etc.

And as spidey mentioned, there is almost always something that can use fixing....

[Spidey]

Dont forget your extra time. One benefit of condo living is your weekend time freed up, expecially in the summer. No yard work and no snow shoveling in the winter

[dolphie]

most things i can think of have already been mentioned.
something with ours we didn't budget for was landscaping. our lawn was crap, and we had no gardens at all. Just putting in a few (nice) medium sized ones and fixed the lawn was a big cost. we've easily spent a couple grand on trees, shrubs, dirt (truckload), grass seed, fertilizers and other things. we pretty well tilled the entire property, levelled it and reseeded it.
The worst is done now....but just another thing you might need to consider.

edited to add: the garden and yardwork is soemthing i love to do. with kids, it gives you something you can work on together, and you get lots of outside quality time with the family doing it.
Too the naysayers, yardwork and having a yard isn't a burden at all if you use and enjoy it :)

[StarvinStudent]

Some areas have residential association fees. Normally it's not too significant. My lake fees are 400 a year, but the houses that back on to the lake are significantly more.

Alarm monitoring fees if you plan on getting a system.

[mjohare]

Great advice everyone. Many thanks.

Can anyone say some more about mortage insurance costs. Roughly how much would it cost on a 350K house?

[Spidey]

most things i can think of have already been mentioned.
something with ours we didn't budget for was landscaping. our lawn was crap, and we had no gardens at all. Just putting in a few (nice) medium sized ones and fixed the lawn was a big cost. we've easily spent a couple grand on trees, shrubs, dirt (truckload), grass seed, fertilizers and other things. we pretty well tilled the entire property, levelled it and reseeded it.
The worst is done now....but just another thing you might need to consider.

edited to add: the garden and yardwork is soemthing i love to do. with kids, it gives you something you can work on together, and you get lots of outside quality time with the family doing it.
Too the naysayers, yardwork and having a yard isn't a burden at all if you use and enjoy it :)

I enjoy yardwork to and gte the kids to help lots just to sepnd time. But it can be time consuming to do everything on one Saturday

The feeling of satisfaction when done though is great as well

[dolphie]

time consuming to do everything on one Saturday
very true. I'm a shiftworker (12 hours) so I only work 14 days a month (yay!)
I guess if i had to shove it into 2 days a week off I wouldn't enjoy it so much.
I put around out there for a little bit about every day off i have :)

[StarvinStudent]

Great advice everyone. Many thanks.

Can anyone say some more about mortage insurance costs. Roughly how much would it cost on a 350K house?

http://www.tdcanadatrust.com/mortgages/mort_critical.jsp

There's a table that lists the rates. Keep in mind, this is based on your mortgage amount not your house value.

As a public worker, aren't you provided extensive insurance from your employer? I was told by my mortgage broker that it wasn't worth it especially since I have insurance from work anyways.

[Acrossenger]

property tax
hydro
heat
water/sewer
maintenance
mortage insurance
home insurance

How much would you say a typical house(say $500K) in Ontario all these above items should cost? My experience is around $10,000 a year.

- gardener (even better if gardener plows the driveway in winter)
- cleaner
- telephone
- cable/satellite TV
- internet

Above items should costs around say $2500 per year.

mortgage
- well, the interest rate is around 5-6% right now

[notanexpert]

property tax
hydro
heat
water/sewer
maintenance
mortage insurance
home insurance

How much would you say a typical house in Ontario all these above items should cost? My experience is around $10,000 a year.


What's an average house in Ontario though?
Within a 2 minute walk of my house there are houses that would cost more than 10k a year in property tax alone!

I think the house we are talking about is about 500k, so the property tax (in Toronto mind you), would be .0083% of that which works out to $4150.
With a 10k budget, I think you may be a little high for a house in the $500k range, outside of mortgage payments. My house is assessed at $585 and I spend (on average) about $9k per year on items other than mortgage, although, as I posted above, that amount can vary widely year to year due to maintenance cost variability.

[TotallyKiller]

In Calgary that would be about 20K+ per year. If you can get all that for a house and for 10K then you are getting a good deal.

[don242]

Great advice everyone. Many thanks.

Can anyone say some more about mortage insurance costs. Roughly how much would it cost on a 350K house?

I am not sure of the costs of the insurance. It depends on your age and health also. I would suggest (as mentioned previously) that you look to some sort of life insurance policy instead. Life insurenace is cheaper than mortgage insurance and if something does happen to one of you, life insurance offers flexibility with the money to either pay off your mortgage or just continue making ragular payments with the money and using the money for getting on with life. Whereas mortgage insurance strictly pays off your mortgage if something happens.

[eelfliw]

Can anyone say some more about mortage insurance costs. Roughly how much would it cost on a 350K house?
Mortgage insurance..... check the terms VERY CAREFULLY. Find out who's the beneficiary of the policy and find out what condition(s) will trigger the coverage.

Also, determine the amount of coverage you'll need in case anything happens. I've see many people overbought way too much coverage from several different companies and end up losing track of all the policies and not claiming.

The bottom line, similar to consolidating all your debts, determine your financial needs if you die or become incapacitated for whatever reason and consolidate your insurance into one policy which provides enough financial support to address all your financial needs. Don't get mortgage insurance here, life insurance there, job insurance somewhere else, LTD insurance with another company etc.

[jerrytoyer]

that is expensive

[philelmo]

does anyone agree with me that the land transfer tax is ridiculous? for a 1st time buyer, i get no credits
the max limit purchase price to get a break on the transfer tax is like 425000??? what if my first place is more?
and they ddon't take into consideration that housing prices have risen so much

I don't even get partial credit.... (correct me if i'm wrong)

[batman321123]

Don't forget :

- home insurance
- gardener (even better if gardener plows the driveway in winter)
- cleaner
- telephone
- cable/satellite TV
- internet

There's no condo fee unless the house is part of a condo corp.

How old is the house? If really old (build before 1950s), you'll have to spend $$$ ripping out old wires and replacing electrical panel if it isn't already done. The water pipes may need replacing if it's made of lead or galvanized steel. Bsmt may have leaks. Insulation may contain asbestos & UFFI. Home insulation may not be adequate.

Don't get a gardener or cleaner. You can do that yourself, maybe not as well, but it'll be cheaper.

[Jucius Maximus]

does anyone agree with me that the land transfer tax is ridiculous? for a 1st time buyer, i get no credits
the max limit purchase price to get a break on the transfer tax is like 425000??? what if my first place is more?
and they ddon't take into consideration that housing prices have risen so much

I don't even get partial credit.... (correct me if i'm wrong)

If you are a first time buyer who can afford a place worth $425,000 then I think you can afford to pay the LTT. ;)

I bought my first one last year (for less than 425K) and I paid almost nothing in LTT.

[dealguy2]

In a home you need to also budget for the really big stuff down the road. I put away about $100 a month into an account for things like a new furnace or a new roof or a hot water tank, major appliances and things like that. You just know all of these things will need to be replaced or repaired one day so it's best to tuck away dough for this down the line.