Now that you have decided to purchase a home, there are additional costs to consider, some will be incurred before closing and some will be due at the time of closing.
Application Fee
Some specialty lenders will charge an application fee to process your mortgage application.
Appraisal Fee
An appraisal is an estimate of the market value of your new home and may be required by your mortgage lender. The cost is usually $250 - $350.
Estoppel Certificate Fee
This fee applies if you are purchasing a condominium or strata unit and could cost up to $100.
GST
Goods and Services Taxes are payable only on newly constructed homes and commercial properties.
Home Inspection
A home inspection will probably be a condition of your Offer to Purchase and may cost over $200 depending on the complexities of the inspection. Home Inspectors evaluate the physical condition, structure, construction, and mechanical systems of your new home.
Interest Adjustment Date
Using a monthly mortgage payment option: If the closing date on your new home is May 15, the interest adjustment date (IAD) will be June 1 with the first payment being July 1. Interest will be charged from May 15 – June 1 and included in your July 1 payment.
Land Survey
A document that specifies precise property boundaries and building locations. It is useful in determining if boundary violations or encroachments exist that may impact your ability to purchase and /or finance your home.
Land Transfer Tax
This is provincial sales tax calculated on the purchase of your home. To calculate the land transfer tax on your purchase.
Legal Fees
There will be fees payable to your lawyer for registering your mortgage and searching the title. You are also responsible to cover disbursements (phone calls, mailings, etc…). Costs vary from lawyer to lawyer and whether you are purchasing or refinancing.
Mortgage Broker Fees (if applicable)
Most brokers do not charge to arrange your mortgage, however fees may be charged for specialty lending situations including commercial property.
Mortgage Loan Insurance Premium
If you are borrowing more than 75% of the value of your home, your mortgage must be insured with Canada Mortgage and Housing Corporation (CMHC) or Genworth Financial Canada. The insurer will charge a premium (rate) depending on the “loan to value”. The formula is:
Click here to check out your insurance cost.
This insurance premium will be added to the cost of your mortgage; however, you will be responsible for the PST amount on closing.
Property Taxes
The amount of prepaid municipal property taxes will be adjusted between the vendor and the purchaser by their respective lawyers on the closing date.
Title Insurance
There are three forms of compensation available to a purchaser or mortgagor when there is a defect with the title of your new home:
- LawPRO – protects the purchaser from solicitor negligence
- The Land Titles Assurance Fund – protects the purchaser from errors in Registry Office records
- The Land – A title insurance policy that could cost over $200 that protects the purchaser from losses resulting from title risks covered by the policy. e.g. tax arrears, fraud, survey errors.
