Buying a house has a number of costs attached to it. The buyer has to pay number of fees, legal costs and other expenses. The following table gives an idea of what a buyer should expect in terms of closing costs.
| Item | Description | Approximate cost (may vary) |
|---|
| Down Payment: |
You should have the amount ready. The source may be many and saving is one of the most prudent and popular. |
Varies. |
| Mortgage Default Insurance Premium: |
Normally if you want the best interest rate and putting less than 20% in down payment, you have to pay the mortgage default insurance premium. It is usually added to the mortgage. So there is no direct financial impact. |
Varies. |
| Indirect broker fees: |
Although the seller pays the real-estate broker, ultimately it is very well known who pays the money. |
May vary very widely. It adds up in your mortgage amount. |
| Title Insurance: |
A title insurance protects the buyer against many problems which may arise (related to property title) after the purchase. |
It cost about $250-$300 + tax for an average home. |
| Land Transfer Tax (LLT): |
A buyer has to pay the Land Transfer Tax upon purchase of a property. In Ontario first time home buyer gets a break from this tax. |
You can use the table given below. |
| Lawyer Fees: |
The lawyer who helps the buyers charges some fees against his / her service. The cost may vary. |
It is around $500 + tax for an average transaction. |
| Registration: |
When the titles are registered with the land registration office and municipal offices there are some fees. |
Usually it is close to $100 + tax. Contact your lawyer for an estimate. |
| Miscellaneous lawyer fees: |
Lawyer charges for mailing, photocopies and faxing. |
Those all together should be under $200 to $300 + tax. |
| Statement of Adjustments: |
If you buy a home in the middle of the month or in middle of a billing cycle then the utility and other bills have to be distributed proportionally to the buyer and seller. The lawyer will work out your portion of the payment, and prepare a statement of adjustment. |
Varies depending on type of property (condo vs. freehold) and time of year. |
| Homeowners Insurance: |
Normally most of the lenders will demand a proof of insurance before they forward you the fund. It is a legal requirement too in some places. |
In normal cases it is under $100.00 + tax a month. If you have aluminium wiring then you may have to take special measures. |
| Mortgage Application: |
Some lenders charges a fee to apply for a mortgage. Some mortgage broker also asks for some types of deposits. |
It is a variable amount |
| Property Appraisal: |
If you are applying for a refinance then it is mostly mandatory to get an appraisal report for the property. Some lender may ask for one even for first time buyer if they are not sure of the cost of the property. |
Varies depending on the company and type of appraisal requested. Usually less than $500.00 + tax Some lender also offers free appraisal upon funding. |
| Federal and Provincial taxes: |
If you are buying a new home then be prepared to pay the GST or HST. Usually this cost is included in the cost of the property advertised by the builder. |
Varies province to province. You may get a tax break too. |
| Home Inspection: |
You may want to get your home inspected before you buy it. An inspection will identify any structural, plumbing or heating and ventilation flaw the house may have. Some lenders asks for an inspection too. |
Cost of this varies too. Approximately $200 - $500 + GHS or HST |
| Condominium Estoppel Certificate or Status Certificate: |
Many places require condominiums to issue an information packages to a buyers. This package usually contains rules and regulations, declaration, bylaws, insurance information, various financial information, legal description of the unit etc. It may also include information about any legal filings or judgments against the condominium corporation, the possibility of common expense increases, special assessments or insurance claims, all of which could affect condominium fees. |
Approximate cost is less than $200 |
| Moving expenses: |
This is also a major cost. |
Cost Varies. You may earn a tax break if you are moving closer to work. |
| Other unknown costs: |
|
|
| 0.5% of the value of the consideration | up to and including $55,000, |
| 1% of the value of the consideration | which exceeds $55,000 up to and including $250,000, and |
| 1.5% of the value of the consideration | which exceeds $250,000, and |
| 2% of the amount by which the value of the consideration | exceeds $400,000 for land that contains at least one and not more than two single family residences. |
