What surprises many people once they make an offer to buy a home is all of the unexpected costs. In later modules we will discuss some of these items further, but in addition to a down payment, you should also consider:
- closing costs
- lawyer fees
- land transfer tax
- time away from work that will be required to complete the transaction
After you buy a home, there are also many fees and expenses you will need to be responsible for, and which may have been covered by your rent payments before. You've already learned about some of them from the activity earlier in this module where you sorted costs as either ‘one-time expenses’ or ‘reoccurring expenses’. Try to keep these things in mind as you think about home ownership, and then carefully build a budget to see what you can afford. While there are many mortgage calculators that will tell you how much you would end up paying each month, be honest about what you can afford, what you need, and what you are willing to sacrifice on.
Finally, as you work on your budget, you may be tempted to make quick decisions on ways to free up extra money each month. For example, you might think that cutting out smoking would help you to save for a down payment. While this might be true, ask yourself if it is realistic? Remember: budgets only work if they truly reflect what you will spend.On the next page, there is a template that you may want to use to create a household budget. This may take some time, and require you to do a little research on how much you spend each month on different things. Feel free to download and complete this optional template at your own speed.