 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!
Back to Top
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 us or your realtor to help with
this process.
Back to Top
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.
Back to Top
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
Back to Top
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).
Back to Top
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.
Back to Top
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.
Back to Top
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.
Back to Top
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.
Back to Top
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.
Back to Top
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.
Back to Top
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.
Back to Top
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!
Back to Top
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.
Back to Top
|
