When buying a new home there are expenses outside of your mortgage that you need to include into your budget. There are a number of property expenses that the seller may have prepaid and will need to be reimbursed for by the buyer. They include municipal property tax and utilities such as hydro, heating and water. Many lenders will accept Title Insurance in lieu of a survey. Title Insurance can protect against fraud, forgery, title defects and survey problems. Property/Fire Insurance is a must. Proof of insurance required by closing date must cover at least the replacement value of home and contents.
You will be required to pay any interest accrued between your closing date and your first scheduled mortgage payment. This has to be paid on the interest adjustment date. A home inspection is normally recommended before finalizing the offer to purchase because it may show areas where repairs are required. A status certificate is required only if you are purchasing a condo. It outlines a condominium corporation’s financial and legal state of affairs. Usually a condo has maintenance fees, if applicable. An appraisal of the property is only required for conventional mortgages to confirm market value before finalizing your mortgage. New homes are subject to HST but may qualify for a HST rebate. Resale homes are not subject to HST. The builder may include HST in the purchase price. Be sure to ask, not knowing could cost you thousands of dollars more at closing then you had anticipated. Land transfer tax is a fee charged to the purchaser when a property changes ownership. This is generally the largest portion of closing costs on a resale home and can range from about .5% of the value of the property, Toronto properties are subject to a separate city land transfer tax.
Contact Dwayne Swan, Broker, ABR , 519-661-9848
Century 21 First Canadian Corp. Brokerage, 420 York St. London, ON N6B 1R1