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Heather Daoust, AMP Accredited Mortgage Advisor 604 838-6445 heatherdaoust@origingroup.ca |
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First Time Home Buyers  Description of Closing Costs 1. Legal Fees A lawyer or notary will be necessary in the home buying process. Your lawyer will prepare the mortgage documents, have you sign the documents, and will transfer the property into your name. (Estimated Cost - $700 - $1000) 2. Appraisal Fees An accredited appraiser will look at your home and determine if the price you have offered is what the home is worth. They will compare recent sales of similar properties to determine the estimated value of your home. They will provide a report to your lender that confirms the value. (Estimated Cost - $250) 3. Property Transfer Tax The Property Transfer Tax (P.T.T.) is calculated as follows; 1% on the first $200,000 and 2% on any amount in excess of $200,000. The P.T.T. on a home purchased for $275,000 amounts to $3,500. This tax is waived for a first time buyer who meets the following qualifications:
4. Property Tax Adjustment You may have to pay some of your annual property taxes at the time of closing. This would be done when you sign at the lawyer's office. Because every situation is different, you are best to confirm with your lawyer what you will owe. 5. Interest Adjustment If you have chosen monthly mortgage payments, and your payment comes out on the first day of the month, you may have an interest adjustment. If the purchase of the home closes on May 29, for example, you will have to pay for three days of interest on your mortgage. (May 29-31). If the purchase closes earlier in the month, you may have a larger interest adjustment. It is best to talk with your lawyer to find out what your interest adjustment will be. 6. Title Insurance Title insurance is sometimes used instead of a survey, and may be requested by your mortgage broker, lender, or lawyer. Your mortgage broker, lender, or lawyer will discuss title insurance with you if it is applicable for your transaction. (Estimated Cost $250) 7. Fire Insurance Fire insurance ensures you have adequate coverage to pay off your mortgage in the case of fire. The lawyer will want proof that there is fire insurance in place when you go in to sign the papers at their office. Ask your mortgage broker for a referral to an insurance agent who will be able to assist you. 8. High Ratio Insurance Premium When a borrower has less than 20% down on the purchase of their home, they must pay a mortgage insurance premium. The premium varies, so you should check the amount with your mortgage lender. Most people will add this premium on to their mortgage. You do have the option of paying this amount up front. 9. Home Inspection Many people choose to have home inspections, although most of the time it is optional. A home inspector will look through your home and provide you with their professional opinion on the construction of the home. They will advise of any maintenance needing done, and will help you understand what you can expect for maintenance expenses in the next few years. (Estimated Cost $300 - $400) 10. Mortgage Processing Fees Depending on your application you may have a mortgage processing fee. This is a fee charged by the lender and/or mortgage broker to process your application. These fees will be disclosed to you prior to your proceeding with a mortgage commitment. 11. Survey Most financial institutions require surveys. Surveys confirm where the home is sitting on the lot and make the lender aware of anything unusual about the property. You may be able to get an acceptable copy of the survey from the previous owners, and save the survey fee. (Estimate Cost $350) 12. Utilities Connection Charges Some utilities charge a move or connection fee. You will need to contact each utility provider to find out their charge. |
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