Before the closing date of your new purchase, your lawyer presents to you a list of charges that apply to your new purchase. These additional costs are surprising to many people especially first time home buyers. As a guideline, you should have at least 1.5%- 2.5% of the purchase price in addition to the down payment in order to purchase the property.
Each situation is different so your lawyer will provide a detailed explanation however you can find a brief explanation of the potential costs below.
When buying a home opposed to a condo, a buyer should always have a professional inspection done on the home. The
home is inspected from top to bottom to ensure that the buyer is aware of any potential problems with the home. The
cost for a typical home inspection is usually around $300 - $400 and is well worth the investment. It is also a good
idea to have the plumbing inspected in older homes to look for tree root issues which is also another $300. You will
want to make sure that the home inspector has liability insurance just in case they overlook something.
***In Condos, an inspection is rare as most things like heating and cooling of the unit, fall under the responsibility of the condo building and not the owner. You will want to make sure that all appliances are functioning properly at the time of closing.
If you are obtaining a mortgage to buy a property, most probably, the mortgage amount will be insured. While the insurance premium can be added to the the mortgage, the applicable tax on the insurance premium must be paid at closing.
When buying a home, lenders usually require a recent survey of the property. If one is not available, the cost can range between $600 - $900 for a new survey. Your lawyer will probably suggest you take title insurance on the property to make sure you are not responsible for any leans that may be on the property.
Check with your lawyers for the fees they charge to transfer the property into your name. There is no set rate for the fees that are involved for their services in drafting the title deed, preparing the mortgage and title searches but make sure to shop around and get a good recommended lawyer. Any lawyer can transfer the title, but you want a reputable one incase anything arises.
Ontario charges a land transfer tax that must be paid by the purchaser and the amount of tax is based on the purchase price. First time home buyers purchasing a new home may be entitled to a refund. The city of Toronto also charges a separate land Transfer tax that also has a benefit for first time home buyers. Click here to calculate the amount of tax you have to pay.
Closing adjustments are made to ensure all responsibilities for the seller and buyer are fairly looked after upon closing. These usually involve property taxes, utility bills, and other charges and will be calculated by the number of days the seller occupied the home and the remaining days in the year that the new buyer will occupy the home. In condos, you will definitely see this calculated for the monthly maintenance fees.
For more information on closing costs please complete the form below.