Your lawyer will present to you upon closing a list of costs that represent CLOSING COSTS .
Purchasers are often surprised at these additional fees which are not included in the purchase price of your home. The CMHC and Genworth Financial states that you should prepare yourself and have at least 1.5% of the purchase price set aside for closing costs in addition to the down payment (or to be safe about 2.5% ). These costs will vary among cities and provinces.
A brief explanation of these costs are listed below. Closing costs vary and are depending on specific situations. This list is a guideline to provide you with the information needed to talk with your lawyer. They then can give you a more detailed estimate on your specific closing.
Appraisal Fee ( Required with New Homes)
The appraisal is necessary to supply your lender the appropriate information needed to conduct a professional opinion of market value of that property. The fee associated with this process is mostly the responsibility of the homeowner and it can cost at least $100. And up to $300.
Home Inspection Fee ( Generally Required with Resale )
Home inspection is conducted by a professional and includes a top to bottom inspection of the home. This is for the benefit of the buyer and this service can cost anywhere from $300 to $400. And is worth it. When hiring, a professional home inspector should have Liability insurance in case something is overlooked.
Fire Insurance
Mortgage lenders require a certificate of fire insurance to be in place from the time you take possession of the home. The amount required is generally the amount of the mortgage or the replacement cost of the home. The required amount is the amount of the mortgage or the replacement cost of the home.
The cost varies on size of property, required amount of coverage, the insurance company itself and the municipality involved and can cost most properties anywhere from $250. to $600. annually.
Provincial Sales Tax on Mortgage Insurance
When your mortgage is insured, (CNHC or Genworth Financial), the applicable taxes on the insurance premium must be paid on closing. The insurance premium can be added to the mortgage amount but the tax portion must be paid at closing.
Land Survey Fee or Title Insurance Fee
A survey of the property is necessary and is usually required by lenders. If it is not recent enough or is not available, then a new survey can cost between $600. To $900.Most lenders today will accept title insurance in lieu of the survey which is considerably less.
Legal Costs and Disbursements
Your legal fees and disbursements are all the out of pocket expenses the lawyer incurred while conducting the process of registrations, searches and the supplies.
The Lawyers and notaries charge fees for their services involved in drafting the title deed, preparing of the mortgage and conducting all the searches necessary.
Land Transfer Tax
Canadian Provinces mostly charge Land Transfer Tax payable by the purchaser. This amount varies in each province and is based on purchase price. A first time, new or re-sale home buyer can be entitled to a refund when purchasing their very first home.
New Home Warranty
New homes in most provinces are covered by a New Home Warranty Program. This costs the purchaser approximately $600. If the builder fails to build to a pre- agreed standard or finish or defaults, then the fund will finish or repair to a maximum amount. Visit http://www.tarion.com for more information on the Ontario New Home Warranty.
HST
HST must be paid when purchasing a newly constructed home. You must check with your builder to know if this is your responsibility to pay this. On the offer to purchase the price will say “plus HST” or “HST included” and who will receive the HST rebate.
Some builders may include this cost in their purchase price so the buyer does not have to pay this at closing and will not receive rebates.
Closing Adjustments
The seller should prepare an estimate for closing adjustments for the bills that are the responsibility of the purchaser after the closing date such as property taxes, utilities, etc. Your lawyer will advise you once they know and the various searches are complete.
