Unavoidable Closing Expenses

House Inspection Fees – Professional home inspectors are an important part of your residential sales team to ensure you are buying a resale home that is structurally sound and a good investment. Expect to pay anywhere from $300-400 dollars for the inspection. Usually you will receive a full written report on all areas and systems of your new home.  This information will be required for the insurance company – so keep it handy.  

 Legal Fees – You need a good real estate lawyer who will act on your behalf in purchasing and mortgaging a property. A lawyer takes care of the details of the sale, the transfer of the title, registration, title insurance and survey documentation and land transfer tax. The fees can vary so ask for a quote and find out what that pays for. Estimate $750.00 – 1500.00 dollars 

Survey or Title Insurance – to close a home purchase, you need an up-to-date survey of the property or title insurance can be purchased for less and that protects the lender and the buyer against loss or damage due to an inaccurate survey. Estimate $300- 400.00 dollars 

Land Transfer Tax and GST – Land Transfer Tax is a provincial tax based on a percentage of the purchase price of the property. This tax is calculated on a sliding scale. Land transfer tax rebates are available from the government to first-time buyers of newly built homes to a limit of $2000.00Adjustment Costs – you will be responsible for your share of any costs for utilities, fuel or property taxes the current owner has prepaid. Sometimes property taxes have been paid by the previous owner for up to half a year in advance. All the expenses will be calculated by your lawyer and must be paid at the time of closing; they will be detailed in your Statement of Adjustments which will be presented to you by your lawyer.   

Mortgage Insurance, fees and expenses – depending on whether your mortgage is more than 75% of the property’s selling price if it is you have a high ratio mortgage and you must purchase insurance to protect the lender in case you default. The insurance for a high-ratio mortgage is usually provided by Canada Mortgage and Housing Corporation (CMHC) and is calculated on a sliding scale based on the ratio of mortgage to home value. If you qualify for the minimum down payment of 5%, the insurance premium will be 3.75% of the mortgage value. So for a $200,000 dollar home with a $190,000 mortgage your insurance will be $7,500 dollars. (The insurance premium can be added to your mortgage or paid all at once on closing)   

Moving Costs – Don’t forget the movers, they are expensive and most people move at the end or the beginning of the month so if you can schedule your move for the middle of the month you may get a better deal. If you can obtain your own packing cartons you may save a little. Remember they will charge the maximum amount for boxes and packing. You can always count on at least $1000 dollars for moving expenses but, it could run as high as $5000.00 dollars depending on your instructions to the movers.   

 

Budget up to 2% of your purchase price for closing costs

Bradley Mayer-Harman

Bradley Mayer-Harman

Sales Representative
CENTURY 21 Millennium Inc., Brokerage*
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