• The total costs of buying a house or condo goes beyond the price of the property.  The following is a list of the what you can expect to pay when you are buying a home.

     Some lenders require that you to have from your own personal resources (i.e. savings) 1.5% of the purchase price to cover the closing costs.

     Home Inspection – $400-$600.00     This one-time cost is to check the structural, electrical and plumbing integrity of the property. A pre-purchase home inspection can provide you with the information you need to know about the condition of the house you plan to purchase. More information equals an informed purchase decision, which equals fewer surprises. Minimize the risk to your investment. No one wants to face serious, unexpected costs shortly after a purchase.  This is not required by the lender.

     Appraisal fee – The typical appraisal fee is $250.00 plus tax. You might pay more, if you are living in a remote area or the home is located in an area where there are few comparables.

    If you pay 20% or more down on your home purchase you will be required to pay for an appraisal. This is done to ensure the lending institution is not over lending on the property and to protect you, the borrower, from over paying.

     Down payment – Normally minimum 5% of the purchase price.

     If your down payment is greater than 5% you will pay the balance when you meet with your lawyer/notary. You will have to provide a 3 months transaction history to verify that the down payment came from your own resources. 

    Gift down payment is acceptable from an immediate family member.  The family member must sign a letter that states no repayment of these funds are expected.

    Deposit – In all purchases a deposit is required, usually 24 hours after subjects are removed. The amount is normally 5% of the purchase price.  This forms part of your down payment and is held in trust at your realtors’ office.

    Mortgage insurance premium – If you have less than 20% for the down payment for the purchase, the mortgage has to be insured by one of the mortgage insurers in Canada.  This is a onetime insurance cost that is added to your mortgage amount.  This is to protect the lender in the event you do not pay your mortgage and goes into default.

    Property Transfer Tax – This is a one-time tax payable on the purchase of real estate.  It is based on the purchase price and is payable to the provincial government.  The tax is 1% of the first $200,000.00 and 2% of the balance of the purchase price.  You will pay this when you see your lawyer or notary to sign the mortgage documents.  First Time Home Buyers receive an exemption for properties $425,000.00 and lower. There is a partial tax exemption on home values of $425,001 to $450,000.00.  Certain conditions apply in order to qualify for this tax exemption.

     Survey / Title Insurance – Lenders may ask for an up-to-date survey of the property (house only) prior to finalizing the mortgage. In many cases surveys are paid for by sellers to facilitate the transaction. This expense can be often avoided because most lenders accept title insurance instead of a survey. Title insurance will cost around $300, depending on the property type.

    Legal fees and expenses – Legal fees generally range between $900.00 to $1000.00 to convey the title (transfer the property title to your name) register the mortgage.  You should add $600.00 if you are selling a property at the same time.

    Municipal Property Taxes – Property taxes are based on a calendar year and normally paid in July each year for most municipalities, for the whole year. If the completion date is after the due date for property taxes, you will have to reimburse the seller for the property taxes they already for in advance for the year. You will pay this when you go to the lawyer/notary to sign the mortgage documents.

    Don’t forget to include the “extra” expenses that you may encounter. 

    • Adjustments on your current dwelling, if being sold, (utilities, taxes, fees, etc.)
    • Property Insurance/Fire insurance premium
    • GST, if not included in the selling price
    • Moving expenses
    • Appliances for the new home
    • Furniture, draperies, etc.
    • Maintenance equipment (lawn mower etc.)

    I specialize in mortgage planning. I will help you determine, what are YOUR costs to buying a new home are. I will help you determine how much you can afford to put towards a new home purchase and the ongoing costs of maintaining your real estate investment.