What are the 'hidden' costs of buying a home that everyone should be aware of?

Be careful of buying a home you can barely afford. It will need to be remodeled sometime in the future, probably before the original mortgage is paid. A home equity loan or second mortgage is a nice way to increase your debt. Be mindful that your partner may not be around in the future, or unwilling to pay the debt if you part ways.

Furthermore, when improvements or remodeling are done, it will be at that future market price, not at the level where you originally bought your home. Fixing the roof on my parents' house in Hawaii after a hurricane and to new building code, meant taking out a loan six times what the entire home originally cost, and the mortgage payments grew 33x larger. Then my father died. Oops.

The house is "due" to be remodeled in 2023, and things like a new roof (every 10–30 years) and termite damage repair cannot be ignored. Only God knows how that will be paid, because I haven't been able to afford a home in Hawaii since 1997, if I had bought a house. A contractor pointed out some rot occurring in a corner of the house in which I live. I asked how often a home should be (re)painted. Every five years, he said. Oops. The house I live in is about 30 years old.

Buy all the insurance you believe you will need, that you can afford. After a major hurricane struck my island in 1992 and the ocean came in as far as one kilometer inland, a number of homeowners with beachfront properties were informed that their homes were destroyed due to flood (by storm surges up to 20 feet high), not the hurricane force winds which arrived later. Their losses were not covered by hurricane coverage. They didn't have flood insurance. These were already multimillion dollar homes even if they were ordinary, not luxury homes, in 1992.


This is great question that more people should be aware of.

It is crucial to have a realistic idea of all the costs and expenses involved in purchasing a home to ensure you are not panicking due to a shortage of funds a day or two before the completion date.

For any property, you should account for the added costs of:

  • basic property transfer tax
  • GST
  • Property tax/city utilities
  • monthly strata fee and move in fee
  • bank fees (will be higher if you are getting a mortgage from a private lender)
  • title insurance
  • home insurance
  • legal fee + disbursements

First year investments, like everything from a lawn mower to tools to yard equipment, are easy to overlook.

Also utility costs are higher than an apartment.

And minor repairs, emergency repairs.

Basically some home center is going to nab a paycheck. It will happen.

That extra mortage payment is probably going to get eaten by DIY fever.

Speaking from experience.


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