What are the closing expenses?
Purchasing a home involves one-time costs and monthly expenses. The
largest one-time cost is the down payment. It usually represents
between 5-25%
of the total price of the property. In addition
to the actual purchase price, there are a number of other expenses that
you might be expected to pay for. These are listed below:
GST: You must pay GST on newly constructed homes. However, if
your house is less than $450,000 you may be eligible for a rebate.
There is no GST on resale housing unless there have been substantial
renovations to the property.
Property Transfer Tax: This tax is 1% on the first $200,000 of
the sale price and 2% on the remainder. First-time buyers may be exempt
from paying this tax.
Prepaid Property Taxes or Utility Bills: You will have to reimburse the sellers for any prepaid property taxes or utilities.
Mortgage Insurance: If you get a high-ratio mortgage (a mortgage
where you pay less than a 20% down payment) you will have to buy
mortgage loan insurance from CMHC or a private company. The insurance
premium usually gets added to your mortgage.
Mortgage Application: CMHC's standard fee is $235. CMHC also offers a basic service for a $75 fee but it must be accompanied by an appraisal.
Appraisal: Before your lender approves your mortgage, you may be
required to have an appraisal done. Sometimes your lender covers this
cost otherwise you are responsible for covering this cost. The fee
ranges from $150 to $350.
Survey: Your lender may require an up-to-date survey of the
property. If the seller did not provide you with one, you will have to
pay to have one done. The fee ranges from $150 to $350. Alternatively
Title Insurance can be purchased.
Home Inspection: Most REALTORS® recommend that you obtain a home
inspection by a certified home inspector. It will cost you from $200 to
$400 for a smaller house. Large houses may cost more.
Legal Fees: Lawyer and Notary fees for closing the sale range
according to the complexity of the deal but they will probably be at
least $400.
Disbursements to Land Titles Office: These fees are approximately $300. Your lawyer or notary will arrange this payment.
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Other costs may include landscaping, redecorating, furnishings, appliances and repairs.