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| Lina Garcia linagarcia@rogers.com www.barriefamilyhomes.com / www.casaenbarrie.com Direct: 705-721-2911 Toll Free: 1-866-942-2121 |
Now that you know what you can afford, the next step is to determine the additional costs of
the home-buying process. According to CMHC and GE Capital, one should have, in addition
to the down payment, at least 1.5% of the purchase price for closing costs (we say 2-2.5%,
just to be on the safe side). The costs vary across provinces, and for that matter, cities.
Below you will find a brief explanation of these costs, yet it may not include all items required
specific to your property, or the area in which you have purchased. This is a guideline, but
your lawyer can provide a fairly close estimate, and is the best resource.
Appraisal Fee:
The appraisal provides the lenders with a professional opinion of the market value of the
property. This cost is normally the borrower's responsibility and it ranges as low as $100 for
a drive-by appraisal to as much as $200 for a full appraisal, and the average being $175,
plus G.S.T. Occasionally, the costs could be slightly higher for larger, custom-built homes,
or homes in remote parts.
Home Inspection Fee:
A professional inspection of the home, top to bottom, is for the benefit of the buyer,
therefore, that's who absorbs the cost. A typical home inspection can cost anywhere from
$250-$350, but our opinion is that they are well worth the investment. New home buyers may
not worry about it, but a definite must for buyers purchasing properties older than 5 years.
When hiring a home inspector, make sure the inspector has liability insurance, just in case a
mistake is made.
Fire Insurance:
All mortgage lenders will require a certificate of fire insurance to be in place from the time
you take possession of the home. The amount required is generally at least the amount of
the mortgage or the replacement cost of the home. This cost can vary on the property size
and extras being insured, as well as the insurance company and the municipality. The cost
can vary anywhere from $250-$600 for most properties.
Land Survey Fee Or Title Insurance Fee:
A recent Survey of the property is usually required by the lender, and if one is not available,
it normally costs anywhere from $600-$900 for a new survey. In lieu of the Survey, most
lenders today will accept Title Insurance, at a much lower price of approximately $225.
Legal Costs and Disbursements:
A lawyer or notary will charge a fee for their professional services involved in drafting the
title deed, preparing the mortgage, and conducting the various searches. The
disbursements, on the other hand, are out-of-pocket expenses incurred, such as
registrations, searches, supplies, etc., plus G.S.T.
Land Transfer Tax:
Most provinces charge a land transfer tax, payable by the purchaser, and the amount varies
from province to province. This tax is based on the purchase price (please ask your
mortgage specialist for provincial chart and calculation).
New Home Warranty:
In many 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.
Mortgage Application and Processing Fee:
On a high-ratio insured mortgage (mortgages above 75% of the purchase price), the
mortgage insurer (CMHC or GE Capital) charges a fee of $165-$185 for applying and
processing the file, as well as appraising the property. On new homes, this fee drops to $75.
Closing Adjustments:
An estimate should be made for closing adjustments for bills that the seller has prepaid such
as property taxes, utility bills, and other charges. Any bills after the closing date are the
purchaser's responsibility. Your lawyer/notary will let you know what they are exactly once
the various searches have been completed.
G.S.T.:
On the purchase of a newly constructed home, GST is payable, but make sure you know
who pays this, you or the builder. Therefore, on the offer, the purchase price will say "Plus
GST" or "GST Included", and who gets the GST new home rebate. A lot of builders have
included this cost into the purchase price so that the buyer does not have to come up with
that at closing. (As well, this tax is also charged on all professional fees).
the home-buying process. According to CMHC and GE Capital, one should have, in addition
to the down payment, at least 1.5% of the purchase price for closing costs (we say 2-2.5%,
just to be on the safe side). The costs vary across provinces, and for that matter, cities.
Below you will find a brief explanation of these costs, yet it may not include all items required
specific to your property, or the area in which you have purchased. This is a guideline, but
your lawyer can provide a fairly close estimate, and is the best resource.
Appraisal Fee:
The appraisal provides the lenders with a professional opinion of the market value of the
property. This cost is normally the borrower's responsibility and it ranges as low as $100 for
a drive-by appraisal to as much as $200 for a full appraisal, and the average being $175,
plus G.S.T. Occasionally, the costs could be slightly higher for larger, custom-built homes,
or homes in remote parts.
Home Inspection Fee:
A professional inspection of the home, top to bottom, is for the benefit of the buyer,
therefore, that's who absorbs the cost. A typical home inspection can cost anywhere from
$250-$350, but our opinion is that they are well worth the investment. New home buyers may
not worry about it, but a definite must for buyers purchasing properties older than 5 years.
When hiring a home inspector, make sure the inspector has liability insurance, just in case a
mistake is made.
Fire Insurance:
All mortgage lenders will require a certificate of fire insurance to be in place from the time
you take possession of the home. The amount required is generally at least the amount of
the mortgage or the replacement cost of the home. This cost can vary on the property size
and extras being insured, as well as the insurance company and the municipality. The cost
can vary anywhere from $250-$600 for most properties.
Land Survey Fee Or Title Insurance Fee:
A recent Survey of the property is usually required by the lender, and if one is not available,
it normally costs anywhere from $600-$900 for a new survey. In lieu of the Survey, most
lenders today will accept Title Insurance, at a much lower price of approximately $225.
Legal Costs and Disbursements:
A lawyer or notary will charge a fee for their professional services involved in drafting the
title deed, preparing the mortgage, and conducting the various searches. The
disbursements, on the other hand, are out-of-pocket expenses incurred, such as
registrations, searches, supplies, etc., plus G.S.T.
Land Transfer Tax:
Most provinces charge a land transfer tax, payable by the purchaser, and the amount varies
from province to province. This tax is based on the purchase price (please ask your
mortgage specialist for provincial chart and calculation).
New Home Warranty:
In many 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.
Mortgage Application and Processing Fee:
On a high-ratio insured mortgage (mortgages above 75% of the purchase price), the
mortgage insurer (CMHC or GE Capital) charges a fee of $165-$185 for applying and
processing the file, as well as appraising the property. On new homes, this fee drops to $75.
Closing Adjustments:
An estimate should be made for closing adjustments for bills that the seller has prepaid such
as property taxes, utility bills, and other charges. Any bills after the closing date are the
purchaser's responsibility. Your lawyer/notary will let you know what they are exactly once
the various searches have been completed.
G.S.T.:
On the purchase of a newly constructed home, GST is payable, but make sure you know
who pays this, you or the builder. Therefore, on the offer, the purchase price will say "Plus
GST" or "GST Included", and who gets the GST new home rebate. A lot of builders have
included this cost into the purchase price so that the buyer does not have to come up with
that at closing. (As well, this tax is also charged on all professional fees).
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| Info Importante |
