It’s important to know exactly what costs other than the purchase price you’ll be responsible for when you buy a new home. closing costs they’re often a surprise to new homeowners and can be quite substantial (1.5-2.5% of purchase price), so it’s important to budget for them in addition to down payment, moving costs and decorating . What are closing costs? Here is a short list.
home inspection: An inspection by a certified professional benefits the buyer and helps alleviate concerns regarding the condition of a property. A home inspection costs between $400 and $500.
Mortgage Appraisal: Lenders require an appraisal of a property to determine market value before they process your mortgage. While the lender often waives, appraisals can range from $150 to $450. Some lenders also charge a mortgage application fee.
Property inspection or title insurance: When a new survey is not available, title insurance protects buyers from losses due to title defects. While a survey can cost upwards of $1,000 depending on the size of the property, title insurance typically costs around $275.
Property Transfer Tax: Payable to the province, this tax is calculated in tiers as a percentage of a home’s sales price (see http://www.callthom.com/resources/calculators/ ). First-time homebuyers may qualify for a rebate of up to $4,000.
Home insurance: Mortgage lenders require a certificate of insurance when you take possession of your home. Like all insurance, the price varies based on a number of variables, but ranges from $750 to $1,500 for most properties.
Adjustments (between Seller and Buyer): Buyers are required to reimburse the seller for any advance payments they have made in connection with the property, such as property taxes, utilities, condo fees, or oil tank filling.
Legal Fees and Disbursements: Your attorney will charge you a fee for professional services, including title search, title drafting, and mortgage preparation. These fees vary, but expect to pay between $600 and $1,000, plus out-of-pocket and miscellaneous up to $350.
Harmonized Sales Tax (HST): Resale homes are not subject to the HST, however, the HST is paid on the sales price of a newly constructed or significantly renovated home. The HST is also collected in professional fees and insurance fees from the Canadian Mortgage and Housing Corporation (CMHC).
Not all of these costs may apply, and others may apply depending on your circumstances. It is best to talk to your attorney for more information.
