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Closing Costs

Closing Costs

Rule of Thumb:  2 - 3% of the Purchase Price

To avoid any surprises on closing, here is a list of what to expect in the way of costs.

Deposit:  Part of your down payment, a deposit is due upon acceptance of your offer.

Home Inspection:  Prepared by a qualified inspector to assess the property for defects and poor maintenance.

Appraisal:  Prepared by an appraiser chosen by the lender, CMHC or GE  (if applicable).

Legal Fee/Disbursements:  Your lawyer will quote the fee for closing the purchase and mortgage(s) plus an approximation for the disbursements, which includes registration fees, courier costs, photocopies, etc.  Ask for an estimate.

Land Survey or Title Insurance:  Your lawyer or the lender will specify whether a survey is necessary or if title insurance will be acceptable in lieu of a survey.

Fire Insurance:  You will have to arrange and maintain fire and extended coverage insurance for the outstanding balance of the mortgage or the replacement value of the building.

Ontario Land Transfer Tax:  0.5% on the first $55,000 of the purchase price; plus, 1% on the balance of the purchase price up to $250,000; plus, 1.5% on any amount over $250,000 up to $400,000; and then 2.0% on the balance of the purchase price over $400,000.  The land transfer tax is due on closing and reflected in the “Statement of Adjustments” which your lawyer prepares prior to closing day.

Interest Adjustment:  Monthly mortgage payments are usually due on the first of the month.  Unless the closing date is the first of the month, you must prepay the amount of the interest accruing up to the 1st day of the following month known as the “interest adjustment date” (IAD).  If however, you choose bi-weekly or weekly payments your interest adjustment period may be much shorter.

Prepaid Expenses:  If the Vendor has prepaid any other expenses such as utilities, water and sewage taxes, oil in tank or property taxes, they must be compensated.  This will be reflected in the Statement of Adjustments.

Property Tax Hold-back:  If the lender is collecting and paying property taxes you may be required to pay to the lender an amount to ensure sufficient funds are available to pay the next instalment of property taxes when due.  An alternative to a property tax holdback is for the lender to increase the tax portion of the regular payment proportionately to ensure sufficient funds are on hand in time to pay the taxes when due.

Other Fees: Occasionally, a lender or the broker will charge a fee for providing the mortgage.  If so, these costs should be disclosed to you at the time the Statement of Mortgage (disclosure statement) is issued to you.

GST:  Is payable on all new homes, commercial properties and land.  GST is NOT payable on un-renovated residential re-sales.

Moving Expenses:  You may have to allow for the expense of a professional mover or the rental of a moving van.

Appliances:  You will likely need four major appliances.

Decorating:  Carpets, drapes, furniture and painting may be necessary.

Repairs:  You may have some immediate renovations to do especially if the financial institution withholds some of the mortgage money on the condition specific repairs be made.

Tools:  You may need lawn tools, garbage cans and snow removal equipment.

Home Buyers Guide

Absolutely everything you need to know about buying a home in this 24 chapter guide!

To obtain your FREE copy of the full Home Buyers Guide fill out this form below

Before you make what is likely to be the biggest financial decision of your life, call us at 866-544-4001 or email Justin Christie or Keith Walper

To maximize the benefits to you, you may want to consider enlisting the services of a  Mortgage Intelligence agent.  We negotiate with major financial institutions, chartered banks, trust and insurance companies, Canada Mortgage and Housing Corporation, Genworth and others to bring our clients the most competitive mortgage rates and terms.  Mortgage Intelligence will usually earn a commission or fee from the lender* for all the work, advertising and promotion done on their behalf.  Our professional services are provided, in most cases, at no cost to you.  We are constantly updated on rate changes and new products being introduced in the market.  As our client, you can choose from the widest range of options, obtain the most competitive rate and best product suited to your specific needs.  An extensive network of financial institutions has enabled many of our clients to obtain savings of up to 1.40% below posted lender rates.

For more information or a free consultation - Please contact Justin Christie or Keith Walper at 519-238-HOME(4663) or toll free at 1-866-544-4001.

* Subject to certain guidelines

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