Buying ... purchase price + extra cost = closing cost.
This is a list of possible extra costs involved in purchasing a home. Not to worry, most are a one- time cost. With the exception of condominium maintenance fees, property taxes, property insurance and utilities.
Part of your down payment, a deposit is due upon acceptance of your offer.
Home Inspection Fee - Optional
Inspectors are unregulated in many provinces, so fees range widely from about $350- $500 plus HST. Some properties may require addition inspections if there is concern about urea formaldehyde insulation, termites, buried oil tanks etc. Larger more expensive homes or rural properties will cost more to inspect, in the event of a rural property you may require addition inspections such as water quality and pot ability, septic systems etc. An inspection can take between 2 to 4 hours and I strongly advise my buyers to be in attendance if possible, it's a great opportunity to learn about your home Most inspectors are eager share their knowledge during the inspection, and will provide a written assessment of your home so you can make an informed decision regarding the purchase of the home and the future cost estimates for the foreseeable repairs, if any. It's a small price to pay for peace of mind.
Renovations and Repairs
In the course of your inspection your home inspector may indicate that the home needs repairs such as roof, system inadequacies, and potential safety hazards, don't forget to factor these costs into the price of the home.
Land Transfer Tax
This tax applies here in Ontario. It varies as a percentage of the property's purchase price. It is due on closing and is reflected in the "Statement of Adjustments" which your lawyer prepares prior to closing your closing day. Link to Land Transfer calculator __________.
0.5% $0-$55,000 +
1.0% $55,000 - $250,000 +
1.5% $250,000 - $400,000 +
2.0% over $400,000
Don't forget the Tax -HST ?
The 13% H.S.T applies to new housing only. However, there is a rebate to a maximum of 2.5% if your house costs less than $450,000.00. There is no HST on resale housing unless the home has been substantially renovated, and then the tax is applied as if it were a new home. GST is normally due and payable when the real estate transaction is completed-generally the "closing date".
Your lender may require a property appraisal at your expense, unless you have a substantial down payment. A basic appraisal for mortgage purposes will probably cost between $150.00-$250.00. The exception to a onetime payment may be in the event that you may require refinancing on your home at a later date. Many lenders may consider waiving this fee. Please make inquires at time of negotiating you mortgage.
Monthly mortgage payments are due on the first of the month. Unless the closing date is the firs to the month, you must prepay the amount of the interest accruing up to the first day of the following month, the Interest Adjustment date.
Closing March 15th
I.A.D. April 1st
First Payment May 1st
Interest from March 15th to the 31st must be paid on closing day. However, you if you choose bi-weekly or weekly payments your interest adjustment period will be much shorter.
Property Tax Holdback
If the lender is collecting and paying property taxes you may be required to pay to the lender an amount to ensure sufficient funds are available to pay the next installment of property taxes when due.
Mortgage Brokers Fee
Occasionally, a lender or broker will charge a fee for providing the mortgage. If so, these costs should be disclosed to you at the time the Statement of Mortgage is issued to you. In many cases, however, brokers are paid by the lenders.
Your lender will require an up-to-date survey. Ask the vendor to provide one as a condition of you Offer to Purchase, or you may be required to have one done. If no survey is available or if it is out-dated, title insurance may be your solution, it is accepted by most lenders in lieu of survey.
Mortgage Loan Insurance Premium and Application Fee
If your have a high-ratio mortgage, your lender will require mortgage loan insurance provided by CMHC or a private company. The insurance will cost between 0.5 % and 3.75% of the amount of the total mortgage (additional charges may apply) and can be included in your mortgage or paid up front .This premium is subject to 8%, and this tax must be paid on closing The application fee will range from $75 to $235 depending upon how the lender processes your application.(consult your local lender for further details)
CMHC Calculator - How Much Can You Afford
Title Insurance - Optional
For a one time premium,( should be less than $350 for a property less than $500,000, condominiums should be less than $200 depending on the insurer) title insurance protects against many of the risks attached to home ownership, such as errors in land registration documents, zoning infractions and even fraud or forgery. Title insurance can also mean no survey and no delays. Title insurance is available through lawyer's right across Canada and the policy stays in effect for as long as the insured owns the property. There are three major carriers Stuart Title, First Canadian and Titles Plus.
Status Certificate (condominiums- apartments and townhouses only) - Optional
A certificate that outlines condominiums bylaws, the corporation's financial and legal state. The cost of this certificate and supporting documents will cost you up to $100 but an attempt to negotiate this cost in your Offer to Purchase is advisable.
Lawyer (notary) Fees
Even a straight forward home purchase requires a lawyer to review the Offer to Purchase, search the title, draw up mortgage documents and tend to the closing details. Lawyers' fees for a mortgage range widely depending on the complexity of the deal but will be at least $500 plus an approximation for his disbursements, which includes registration fees, courier costs, photocopies, etc. It is advisable to ask for an estimate.
Taxes are always a certaintly. If you have a high-ratio mortgage, your lender may require that you have your property tax instalments added to your mortgage payments.
Property taxes, Cable, Heating, Electric, Telephone etc.
This insurance covers the replacement value of the structure of your home its contents. Your lender will insist on this because your home is the security for your mortgage.
Condominiums charge monthly fees for common-area maintenance, such as groundskeeping and carpet cleaning. Fees range widely depending on the type of structure.