Here
is a summary of the typical costs you may have
to pay when you buy a home.
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Items
marked by an asterisk (*) are usually included along with
the balance of your downpayment in the cheque you give your
lawyer a week or two before closing. Your lawyer will give
you a detailed estimate of the amount required.
HOME
INSPECTION:
typically
$250 to $375 plus 7% GST
LOAN
APPLICATION FEE:
variable,
depending on your financial institution
MORTGAGE
INSURANCE:
(usually
required if the mortgage exceeds 75% of the appraised
value of the property) up-front CMHC application fee of
$75 (with appraisal) or $235 (without appraisal) and a
premium of up to 3.75% of the total loan, plus 8% PST,
which may be paid on closing or added to the mortgage
APPRAISAL:
typically
$180 to $250 plus 7% GST, depending on your financial
institution (many lenders offer to waive this fee as an
incentive to borrow from them)
SURVEY:
about
$1,000 plus 7% GST for a conventional urban property,
although nowadays Title Insurance at a cost of around
$200 to $300 is an option
LEGAL*:
$600
plus 7% GST for lawyer's fees, plus up to $700 for legal
disbursements for a straight-forward transaction (this
includes the cost of title searches registering your deed
and mortgage - your lawyer can provide a more accurate
and detailed estimate)
LAND
TRANSFER TAX*:
-
$5 per $1,000 on the first $55,000,
- plus $10 per $1,000 from $55,000 to $250,000,
- plus $15 per $1,000 over $250,000,
- plus $5 per $1,000 surcharge on single homes and duplexes
for any amount over $400,000
MOVING
EXPENSES:
variable
and at your discretion, but don't forget to plan for
them
HOME
INSURANCE:
$400
typically, for an urban location
UTILITY
DEPOSITS:
variable,
and usually not required if you have an established
credit record with the utility (check with the utilities
when you are arranging for service)
MORTGAGE
INTEREST*:
Financial
institutions typically set the first date of your mortgage
term (Interest Adjustment Date or IAD) at the beginning
of the month after you purchase the property (or at
the start of the following month if you buy near the
end of the month). Interest for the period between the
date of closing and the IAD may be charged directly
to you by your lender, in which case it will likely
be drawn from your account around IAD. In some cases
this interest is deducted from the amount advanced to
your lawyer in order to close, in which case your lawyer
will ask you for the amount with the balance of your
downpayment. The Mortgage Commitment you receive from
your lender will set out the Interest Adjustment Date.
If your financial institution will also be collecting
and paying municipal taxes on your behalf, it will require
prepayment of a portion of the annual tax bill either
at closing or over the first year of the mortgage. Ask
your financial institution how it handles pre-IAD interest
and municipal taxes when you are arranging your financing,
to avoid unexpected surprises.
CLOSING
ADJUSTMENTS*:
Closing
adjustments are intended to ensure that both vendor
and purchaser pay their fair share to or from the closing
date for such costs as municipal taxes or fuel oil.
They are variable based on such factors as when closing
occurs, the amount and payment date of municipal taxes
and the size of the oil tank. If you are assuming an
existing mortgage, there will also be an adjustment
for mortgage interest.
These
estimates are guidelines only and are not warranted.
Actual costs will vary based on the specific circumstances
of the transaction. Consult your lawyer and lender for
actual costs.
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