FAQ - Closing Costs

Q: What other fees will I run into when buying a home?

A: Despite today's attractive mortgage rates and selection of homes from which to choos, you should keep in mind closing costs in addition to your down payment.

These various charges can add up and, for the most part, they are all legally required payments in buying a property. These payments include:


Hard Costs

1. Legal Fees

Since a lawyer or notary public is an essential part of your home-buying team, the work you'll need completed involves legal fees. Most legal fees include searching the title of a property, arranging a property survey if necessary and handling other disbursements as required. (Avg $900+)

2. Home inspections

A professional home inspector knows what to look for and can confirm or add to the information you have gleaned from the REALTOR® or your inspection. (Avg. $400-$600)

3. Property Transfer Tax

This provincial tax is payable at the rate of 1% on the first $200,000 of the fair market value and 2% on the balance. "Fair market value" is the price that would be paid for a property on the open market. The actual purchase price is usually a good indicator of the fair market value. Some exemptions may apply, including for first-time home buyers.

4. GST

5% GST is payable to some degree on the purchase price on all NEW homes, although partial rebates are available on the purchase of most homes. A resale residential home is usually exempt from GST.

5. Property Insurance:

This insurance covers the replacement value of your home and its contents. Most mortgage lenders will require proof that you have this insurance before processing a mortgage.

6. Hook-ups

There may be hook-up charges required for appliances and services such as telephone, TV cable, hydro and other utilities.

7. Moving costs

The basic costs involved in moving from your old place into your new home, particularly if you use a professional moving company.  Costs vary depending on size of the move 

Soft Costs

These fees are often rolled into your mortgage, contact your lender for more details.

1. Mortgage Insurance and application fee:

For any high ratio mortgage, which is any mortgage in which 80% or more of the house's purchase price is covered by the mortgage, the lender requires mortgage insurance.

2. Extra charges

You may also be required to pay the costs of such things as a share of the property taxes for the current year, heating oil in the tank, or other costs incurred by the seller, but included with the house, prior to the closing day. 
 Remember to add theses costs to your financial plan when saving to buy a home.

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 This blog/web site is made available by Mike Vanderkruyk for educational purposes only as well as to give you general information and a general understanding of Real Estate transactions, not to provide specific advice. By using this blog site you understand that there is no client relationship between you and blog/website publisher. The blog/web site should not be used as a substitute for competent Realtor or Legal advice from a licensed professional.