Buying a condo is a great way to dip your toes into homeownership without worrying too much about maintenance costs that are commonly saddled with apartments and townhouses. But first, you’ll have to get a basic idea about Grimsby condo costs to decide what you can afford and how much mortgage you’ll need.
Did you know the average price for Grimsby condos varies from $339,000 all the way to $900,000 and beyond? The prices you pay depend on the amenities you get, the neighborhood, unit size, and proximity to the city center. Although the aesthetics of a new condo unit may seem enticing, there are a few aspects that you have to consider before going ahead with a purchase.
Pre-construction vs. Resale Condos Costs
Pre-construction condos are normally cheaper than resale Grimsby condos. This is because of various factors such as the need to secure early buyers to help fund the financing from lenders and to compensate for delays or cancellations. The primary difference between pre-construction condos is the way it is financed.
For example, in a resale condo, the minimum down payment may go as low as 5 per cent towards the purchase price. A pre-construction condo, on the other hand, requires you to at least have 20-per-cent down payment secured. Although this amount may seem a little high, it is usually divided into smaller payments, also known as the deposit structure.
Here’s a typical makeup of a deposit structure:
- $3,000 with the offer
- Balance of 5% in one month
- 5% in 3 months
- 5% in 6 months
- 5% at occupancy
Pre-construction Grimsby condos require high deposits in the beginning of a project, usually because the lenders who are currently financing the building will have made this mandatory. Towards the completion of the condo however, the deposit structures are slightly more negotiable, and by discussing the fee structure with the builder, you may be able to extend timelines and even reduce your overall payments.
Additional Fees You Will be Subject To
Most upfront Grimsby condo costs will have a general breakdown as follows:
- The down payment
- Utility installation fees (vary between $50 to $500)
- Insurance costs
- New Home Warranty Plan (between $900 to $1200)
- Land registration
- Assignment Fees (Around $3000)
- Notary fees
- Appraisal and home inspection fees
- Development levies (vary between $200 to $4000)
- Repairs and renovations
These additional fees do not apply to every Grimsby condo purchase, and some may be included in the sale of the unit. But make sure to have your lawyer review the Agreement of Purchase and Sale during the cooling off period to determine which additional fees you may have to pay.
Weigh all your options when it comes to the mortgage and rate of interest. Fully consult with your bank loans officer and financial advisors to decide which Grimsby condo works best for you, and what would be your financial situation if the mortgage rates were to go higher. Make sure to factor in the costs of mortgage loan insurance where applicable (this is often required when the down payment is less than 20 per cent of the unit’s purchase price).
Try to make your payments as frequently as possible, such as twice a month, to pay less interest during the course of your mortgage.
Here are two rules of affordability to keep in mind before determining how much you can spend on housing without upsetting your financial situation:
- Your monthly costs should not be higher than 32 per cent of your gross monthly income
- Your total monthly payments that go toward the debt must not be equal to or higher than 40 per cent of your gross monthly income
If you decide to rent your Grimsby condo, you will have to pay property tax. This is usually included as part of your rent. But when you own the condo, you will be responsible entirely for paying the property taxes. For new Grimsby condos, the municipality in which your unit is located should tell you exactly how much it is that you need to pay.
For older Grimsby condos, your real estate agent should be able to tell you more about property tax. Make sure to get a copy of the most recent property assessment and tax bill. This will give you a bird’s eye view of Grimsby condo costs in great detail.
Utility payments may or may not be included in your monthly condo fees. It is recommended to get an idea of the amount you are expected to pay for utilities, such as water, electricity, and natural gas.
A small percentage of your condo fees will be added to the building’s reserve fund (your local area may have a different name for the reserve fund, such as contingency fund). The reserve fund ensures the condo has enough money to carry out major repairs and replacements of shared elements during the life of the building. These include the roads, roof, plumbing, elevators, sewers, and more.
Other Condo Fees You Should Know About
Many factors determine your monthly Grimsby condo costs. It’s not easy to give an exact formula or calculation. But as a general rule, the average cost may be as low as $0.50 per sq. ft. or as high as $1.00 or more.
You should receive a fact sheet that lists both monthly condo fees and square footage. For example, $500 / 1500 square feet = $0.36 per square foot.
So there you have it, a breakdown of the fees that you are expected to pay for your Grimsby condo.