Closing Cost Check List

What kinds of costs should you be aware of for your closing?
 
Here is a great check list, to ensure that you are Not surprised at closing Time!

 
  • Closing costs are a list of charges your lawyer presents to you on the closing date of your home. Many people are surprised at the additional costs over and above the price of the home. According to the CMHC and Genworth Financial you should have at least 1.5% of the purchase price for closing costs in addition to the down payment (have around 2.5% to be on the safe side). The costs vary among provinces and cities.
     

  • Below you will find a brief explanation of these costs. Please note these are some of the closing costs you may encounter depending on your specific situation. Use this as a guideline then talk with your lawyer who can provide a more realistic estimate for your situation.
     

Red Check MarkAppraisal Fee (Generally with New Homes)

  • An appraisal provides the lender with a professional opinion of the market value of the property. This cost is normally the responsibility of the homeowner and it can cost between $100 - $300.

 

Red Check MarkHome Inspection Fee (Generally with Resale Homes)

  • A professional inspection of the home, top to bottom, is for the benefit of the buyer. A home inspection can cost anywhere from $300 - $400 and is well worth the investment. When hiring a home inspector make sure the inspector has liability insurance just in case they overlook something.
     

Red Check MarkFire Insurance

  • Mortgage lenders require a certificate of fire insurance to be in place from the time you take possession of the home. The amount required is generally the amount of the mortgage or the replacement cost of the home. This cost can vary on the property size, amount of coverage, the insurance company and the municipality. The cost can vary anywhere from $250-$600 annually for most properties.
     

Red Check MarkProvincial Sales Tax on Mortgage Insurance

  • If your mortgage is insured, (CMHC or Genworth Financial), you will be required to pay the applicable taxes on the insurance premium on closing. While the insurance premium can be added to the mortgage amount, the tax must be paid at closing.
     

Red Check MarkLand Survey Fee or Title Insurance Fee

  • A recent survey of the property is usually required by lenders. If one is not available the cost can range between $600 - $900 for a new survey. In lieu of the survey most lenders today will accept title insurance which can cost considerably less.
     

Red Check MarkLegal Costs and Disbursements

  • Lawyers and notaries charge fees for their services involved in drafting the title deed, preparing the mortgage, and conducting the various searches.

  • Disbursements are out-of-pocket expenses incurred during the process such as registrations, searches, and supplies.
     

Red Check MarkLand Transfer Tax

  • Most provinces charge a land transfer tax payable by the purchaser. The amount varies depending on the province. Land transfer tax is based on the purchase price. First time home buyers purchasing a new or re-sale home may be entitled to a refund. Purchasers in most large Canadian centres can add Land Transfer Taxes to their list of closing costs.
     

  • These taxes, levied on properties that are changing hands, are the responsibility of the purchaser. Depending on where you live, taxes can range from a half a per cent to two per cent of the total value of the property. For example if you purchase a property for $260,000 in Ontario, 0.5 % is charged on the first $55,000, 1% per cent is charged on $55,000 - $250,000, while the $250,000 - $400,000 range is taxed at 1.5%. Your total tax bill would be $2,375.00
     

Up to $55,000 X .5 % (of total property value)

From $55,000 to $250,000 X 1 % (of total property value)

From $250,000 to $400,000 X 1.5 % (of total property value)

From $400,000 up X 2 % (of total property value)
 

Red Check MarkNew Home Warranty

  • In most provinces new homes are covered by a new home warranty program. The cost to the purchaser for this warranty is approximately $600 and should the builder default or fail to build to an agreed-upon standard the fund will finish or repair the deficiencies to a maximum amount.
  • For more information on Ontario new home warranty, visit www.tarion.com
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Red Check MarkHST

  • HST is payable on the purchase of a newly constructed homes only. If you are purchasing a new home make sure you know who pays this, you or the builder. On the offer the purchase price will say "Plus HST" or "HST Included" and who gets any HST rebates. Many builders have included this cost into the purchase price so the buyer does not have to come up with it at closing.
     

Red Check MarkClosing Adjustments

  • An estimate should be made for closing adjustments for bills the seller has prepaid such as property taxes, utility bills, and other charges. Any bills after the closing date are the responsibility of the purchaser. A lawyer will let you know what they are once the various searches have been completed.