| Possible Closing Costs when Purchasing a Home |
| When you find your perfect home and your offer has been accepted, you may
think you're through with things. Think again. There are a number of costs
that may come with the closing of the deal, according to the Canadian Mortgage
and Housing Corporation, the government of Canada's national housing agency.
Some closing costs include: |
| |
| Mortgage Loan Insurance Application Fee and Premium |
| If your down payment is less than 25% of the home price, you may be required
to purchase Mortgage Loan Insurance. To get this insurance you may be asked
to pay the required application fee. The lender may add the mortgage insurance
premium to your mortgage or ask you to pay it in full upon closing. |
| |
| Appraisal Fee |
| Your mortgage lender may require that the property be appraised at your
expense. An appraisal is an estimate of the value of the home. The cost is
usually between $250 and $350 and must be paid when you contract for those
services. |
| |
| Deposit |
| This is a part of your down payment and must be paid when you make on Offer
To Purchase. The cost varies depending on the area, but it may be up to 5
per cent of the purchase price. If you wish to make a down payment of 5 per
cent and you give a deposit of 5 per cent, then your down payment is considered
to be made. |
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| Status Certificate Fee (not applicable in Quebec) |
| This applies if you're buying a condominium or strata unit and could cost
up to $100. |
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| Home Inspection Fee |
| Remember that this may be a condition of your Offer To Purchase. A home
inspection is a report on the condition of the home and will typically cost
between $200 and $300, depending on the complexities of the inspection. For
example, it may be more costly to inspect a home that has large square footage,
one that is expensive or one where contaminants such as pyrite, radon gas
or urea-formaldehyde are suspected. |
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| Land Registration Fees (sometimes called a Land Transfer Tax, Tariff or
Property Purchases Tax) |
| You may have to pay this provincial or municipal charge upon closing in
some provinces. The cost is a percentage of the property's purchase price
and may vary. Check with your lawyer/notary to see what the current rates
are. |
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| Pre-paid Property Taxes and/or Utility Bills |
| To reimburse the vendor for pre-paid costs such as property taxes, filling
the oil tank, etc. |
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| Property Insurance |
| The mortgage lender requires this because the home is security for the
mortgage. This insurance covers the cost of replacing the structure of your
home and it's contents. Property Insurance must be in place on closing day. |
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| Survey or Certificate of Location Cost |
| the mortgage lender may ask for an up-to-date survey or certificate of
location prior to finalizing the mortgage loan. If the seller does not have
one or does not agree to get one, you will have to pay for it yourself. It
can cost in the $1000 to $2000 range. |
| |
| Water Quality Inspection |
| If the home has a well, you will want to have the quality of the water
tested to ensure that the water supply is adequate and the water is potable.
You can negotiate these costs with the vendor and list them in your Offer
To Purchase. |
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| Legal Fees and Disbursments |
| Must be paid upon closing and cost a minimum of $500 (plus GST/HST). Your
lawyer/notary will also bill you direct costs to check on the legal status
of your property. |
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| Title Insurance |
| Your lender or lawyer/notary may suggest Title Insurance to cover loss
caused by defects of tile to the property |
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| (Source: Canadian Mortgage and Housing Corporation) |
