There are other costs besides the price that home buyers end up paying when purchasing a home. Here’s a list of the most common closing costs to keep in mind as you work through your home-buying budget.
Your lender needs to determine the property value for mortgage purposes. It may or may not be the same as the purchase price. This fee might be applicable to you depending mostly on the amount of the down payment. Check with me if you need to pay this fee
The bank may include property taxes in your mortgage payments.
A lawyer should review the paperwork of every home purchase. Make sure your lawyer’s quote includes all related expenses and disbursements, not just legal fees.
Mortgage Default Insurance
Protects the lender in case you default on your loan. If your down payment is less than 20%, you’re required to pay an insurance premium, either at closing or added to your mortgage amount.
Land Transfer Tax
Some provinces and cities collect this tax whenever property changes hands. First time buyers are sometimes exempt. In Alberta the estimated closing costs area bout 0.5% of the purchase price in contrast to other provinces that are 1.5% .
A professional evaluation of the structures and systems of your home. While not mandatory, many buyers make an inspection a condition of their offer to purchase. A certified home Inspector’s fee is around $500 depending on the size of the property.
Payable on some properties. There is a GST cost to the Buyer on the purchase of most new properties, although the Buyer will get a partial rebate if the purchase price is less than $450,000
Title Insurance Fee
Covers problems and costs that may arise due to title issues.
You’ll have to pay interest on any gap between the closing date and the first payment date of your mortgage.
Property Tax and Utility Adjustments
You’ll have to reimburse the vendor for any prepaid property taxes or utility bills.
Mortgage Life Insurance
An option that protects your family’s financial security in the event that you or your spouse dies. (This is optional)
If you’d like to discuss how much each of these closing costs would be in your specific situation—and how to budget for them—please give me a call today!