Once your offer on a home has been accepted things can become hectic. You will likely be setting meetings, arranging for your financing and arranging your house inspection. In addition to that you will be making your moving plans. It may seem quite overwhelming when you compound all this with your regular day-to-day responsibilities.
When you work with me we will have reviewed all the closing costs and responsibilities prior to viewing homes. However, with all the commotion of buying a home it can be easy to forget budgeting for closing costs. In order for your sale to complete there are fees owed on, or by, closing day. Most of these fees are in addition to, and separate from, your mortgage loan.
Experts recommend budgeting at least 1.5% of the purchase price toward closing costs.
I have listed most of these expenses below. Please note: These expenses are approximations only – they may vary depending on suppliers, and are prone to frequent changes.
Deposit at time of offer - a minimum of $5,000 which will be held in trust by my Brokerage and will make up part of your down payment.
Mortgage application – Typically not more than several hundred dollars. It is possible that your lender may waive this.
Property inspection (optional but recommended) – $400.-$500. Due at the time of inspection.
Property Appraisal – $300-$500. May be required by the bank especially if putting less than 20% down
Legal fees (including disbursements) – Expect to pay between $1000 -$1300 for a real estate lawyer or a notary. This cost varies depending on the extent of services provided. This is due at closing.
Property site survey - If there is not one available you may want to pay for one if you plan to put up a fence. $350.- $450
Land Transfer Tax – The tax is charged at a rate of 1% on the first $200,000 of the purchase price and 2% on the remainder up to and including $2 million. The PTT is 3% on amounts greater than $2 million.
Interest adjustment – Varies with mortgage amount and terms. Due at closing.
Property tax/pre-paid utilities adjustments – Your lawyers office will calculate this for you.
Mortgage default insurance – Varies depending on the principal amount of your mortgage. Due at closing.
Property/fire insurance – Varies according to coverage level, region and property type. Due by closing.
Title insurance – For properties with a purchase price under $1,000,000.00, the cost of title insurance is generally $225.00, with $175.00 to the Lender Policy, and $50.00 to the Owner Policy. For every additional $1,000.00 over a purchase price of $1,000,000 the price increases by $0.90. Due by closing.
GST - On new homes or homes that have been substantially renovated. Please visit http://www.taxtips.ca/realestate.htm . The GST is due by closing if applicable.
GST will also be payable on your legal fees, inspection costs as well as any other services you require.
Don’t forget to also budget for Moving costs. For additional information please call or email me.