Costs to Consider
Buying a home costs more than the offer you make. There are
numerous other expenses that will add to the amount that you'll
need to spend. This purchase price checklist outlines all the
costs you can expect. Please note that they can vary by province
and are subject to change.
Purchase Price The starting point in your calculation... if
you're like most first-time home buyers, you'll need a mortgage
for the majority of this!
Lawyer's Fees Although fees vary across the nation, it can
cost you up to $1,200 depending upon whether you are re-mortgaging
your existing home or buying new.. Contact me or your realtor to
help with this process.
Land Transfer Tax A tax payable to the Provincial
Government by the purchaser upon the transfer of title from a
seller. This amount is usually not expected by most homeowners. It
can be sizeable. The amount varies from province to province and
is generally a percentage of your purchase price. Cam can advise
you.
Registration Fees Fees paid to the provincial government
for recording a title transfer, mortgage registration or other
instrument such as an Assignment or Lien with the local
authorities. top of page
High Ratio Insurance Must be purchased if you are buying a
home for less than 20% down. A sliding fee scale applies,
depending on the percentage of the purchase price required in a
first mortgage (some minor exceptions).
Compliance Letter Obtained by your lawyer and required in
many municipalities throughout Canada before a property transfer
can take place. This is an acknowledgement from the building
department that the property either has, or is clear of
outstanding work-orders. Work-orders are specific clean-up or
fix-up requirements that the owner is legally required to do, and
which must be completed before ownership can be transferred.
Tax Certificate Obtained by your lawyer at the time of sale
to confirm that local taxes have been paid up to date. If they are
not up to date, the seller is required to pay them from the
proceeds of the sale. If there are insufficient proceeds, then you
may be legally required to pay the outstanding taxes. If, on the
other hand, taxes have been prepaid, you may have to compensate
the seller for them.
Provincial "New Home Warranty Program" premiums - New Homes
Only! A third party (provincial) warranty program between a
builder and a buyer. With the exception of Ontario and Quebec,
membership in such a program is voluntary for the builder. Through
these programs, your home is guaranteed against defects for at
least one year. All homes with a high-ratio insured mortgage
(greater than 80% loan to value) must be enrolled in such a
program.
Mortgage Appraisal and Application Fees Application fees
apply on high ratio mortgages only while appraisal fees are common
to most mortgages. Generally $150 - $235 each would apply.
Home Inspection A report commissioned by a property owner
or purchaser, usually to verify the condition of a property prior
to the "firming up" of a purchase agreement. The scope and detail
may vary, but most reports outline any particular problems and
associated repair costs. Unfortunately, no licensing is required,
and this service is not specifically regulated other than by
general consumer protection legislation. The best safeguard
against inadequate work is to ask for the resume of the Inspector,
or select a name firm, such as Carson Dunlop, who stand by their
work.
Land Survey The legal written and/or mapped description of
the location and dimensions of your land. The survey should also
show the dimensions and placement on the lot of any structure,
including additions such as pools, sheds and fences. An up-to-date
survey is often required by a lender as part of the mortgage
transaction.
Title Insurance New to Canadian consumers over the last few
years is the introduction of title insurance into the home buying
process. Title insurance can be purchased by home buyers to
protect against potential deficiencies in a number of areas, such
as the land survey. There are numerous benefits to this product,
and you should consult your lawyer or Jennifer today.
Connection Charges Some local utility companies (hydro,
gas, oil) charge a fee on closing to connect new buyers up to
their service. More common, however, is an extra charge on the
first billing.
Property Tax and Prepaid Utilities Adjustments If the
previous owner prepaid property taxes or other utilities, they
will be credited the prepaid portion on closing. If they paid all
their taxes by April, expect a large adjustment cost on closing!
Interest Adjustment (IA) If you arrange to make your
mortgage payments monthly on the first day of the month, and your
transaction closes after the first day of the month, your lender
will charge you interest on closing to the next interest date,
called the Interest Adjustment Date (IAD), when your payment cycle
will commence. This can be a sizeable amount, but it is the
correct interest you should pay. For example, close on June 15th,
pay 15 days interest on closing and start payments on August 1st.
