Tuesday, January 16, 2018 / by Ernie Arrizza
The purchase price of your home is only one of the costs you’ll encounter. Here are other possible costs you need to consider:
Mortgage loan insurance: If you are putting less than 20 per cent of the house value down, you’re going to need mortgage loan insurance. Depending on the lender, the premium can be added to mortgage payments.
Appraisal fee: Lenders typically loan a percentage of the home’s purchase price or the market appraisal of the property. Cost depends on the size and complexity of the assignment.
Land survey: The lender may ask for a current survey or certificate of location before signing off on the loan. There can be a substantial cost for having a new survey done on the property.
Deposit: A deposit normally goes with the formal offer to purchase.
Insurance: The lender will require proof of property insurance for the replacement value of the house and its contents from the day you take ownership.
Title insurance: Provides coverage in case of problems with the property title among other things. The cost is relatively low, usually a few hundred dollars.
Application fee: Some lenders will pass on the cost to process your application. These fees vary and some lenders will waive entirely if you have other accounts with them.
Mortgage broker’s fee: If you use a mortgage broker, a fee may be charged to arrange a mortgage on your behalf.
Home inspection fee: An inspection protects the buyer by revealing any problems in the property that you’d want to know before you move in.
Legal fees: You can save some of the legal fees usually charged by the lender if your lawyer draws up the mortgage. You’ll also pay for disbursements which are the costs involved in drawing up the title deed, conducting a title search, and preparing and registering the mortgage.
Land Transfer Tax: There is a provincial Property cash grab the province charges you to buy a house. If you live in Toronto, they want to get their greedy hands on your life investment as well. So If you buy in Toronto there is two taxes and one outside of Toronto.
HST: Resale (used) homes are exempt from HST but it does apply to newly constructed homes and may qualify for a partial rebate depending on the sales price and if the home is going to be your primary place of residence. HST also applies to most of the services provided in completing the real estate transaction.
Other costs: These include moving costs, fees charged by utilities for service hook-ups, property tax and other adjustments (an adjustment takes place when the seller has already paid for something in advance and wants to be credited for the unused portion on the date the house becomes yours), and ongoing maintenance (condo fees etc) and utility costs.
Real Estate Fees: Typically the Seller on paper is paying the fees for Real Estate and it is incorporated in the sale of the property. Some sellers refuse and want the buyer to pay for their own, and this is where you must incorporate that into your purchase price.
Condos: Builder Closing Costs, Condo Reserve Fund, and more. As An Agent the Builders of this generation hits you with a document not even the lawyers can understand, but one thing they do have in there is that they can charge you whatever they want at closing to make a few extra bucks in their pocket. They will charge you for the their closing costs with the city and they will charge you for God knows what. Anyway, know that you will need some extra money in the bank come closing time. Your lawyer can help and cap fees, but you will still be charged something. Bet on that.