What are Closing Costs ?
You’ve put aside a down payment, found a good lawyer and mortgage broker. Well done! Off to a great start in the house purchase process. Just remember, in addition to the expected legal fees and moving costs, there will be a few extra payout when closing the deal. Being informed of these “closing costs” in advance will help ease some unexpected stress. The following list covers typical costs you may encounter when your purchase is completed:
You may need to refund money to the seller if the seller has paid costs in advance that will now be on your behalf. This is when “subject to usual adjustments” comes in play. Typically for portions of municipal property tax, utility bills paid in advance or perhaps fuel oil etc. These are expenses that would have to be paid by you either way. Your lawyer will inform you of these.
Land Transfer (welcome Tax)
Your province levies this tax whenever real estate changes hands. This amount is a percentage price of your property.
Must take effect the moment you are the owner of the home! This protects both you and the lender.
Home Inspection Fee
You may owe this fee to the inspector you hired to check out the physical structure and mechanicals of your home before you decided to buy it.
Home Appraisal Fee
Your mortgage lender requires this appraisal before they issue any mortgage money. They want to be assured that the property is worth an investment of their monies, and the cost of this appraisal is passed on to you, the customer. This fee normally ranges between one and two hundred dollars, dependent upon location and complexity of the property.
A legal survey of your land
Its borders, perimeters, house placement, etc. Sometimes required by the lender, performed by a professional surveyor or company. The previous owner may have a recent survey, which they would pass on to the new buyer; if not, a typical survey can cost you up to one thousand dollars. In the last few years, lenders have accepted title insurance (usually recommended anyway) in lieu of a survey document.
This covers many different situations that could threaten your title to the property. Title insurance is much less costly than a new survey, for example, and would cover most survey concerns. Most homebuyers now look at title insurance as a great way to protect their investment.
Charged on all professional fees. There is no HST on the purchase price of a resale home. Please note that you may be subject to HST for a New Home. More information about HST is available on Government websites.
Date to which the legal title to the property changes hands. You will need to visit your lawyer on this day. He/she will sit down with you, carefully go through the papers for signing, and will point out the closing costs. A good mortgage broker can help you be well-prepared for all the things that happen before the new house keys are finally handed over to you