A lot goes into your closing costs, here
is an outline of what you should expect:
1.
Purchase Price (from offer) less deposit.
2.
Home inspection fee: Approx. $300.00.
3.
Appraisal fee: (lender will arrange appraisal at your
expense, approx. $250.00).
4.
Legal fee for purchase of home: Anywhere from
$400-$600 plus disbursements, which are the photocopies, courier costs,
etc that your lawyer encur while processing your file. Legal
fee for sale of home: Anywhere from $350-$550 plus
disbursements.
Please note most lawyers offer a
better rate if you are buying and selling a home and they both close on
the same day, expect to pay $750-$1000 plus disbursements.
5.
GST: On the legal fee plus disbursments
6.
Registration costs: Purchasers must pay the province of
Ontario a registration fee on each document registered on the title to
the subject property. To register the Deed it is $70.70 to register the
Mortgage it is $70.70.Fee to register charge for new mortgage
7.
Title Insurance: (if you are interested) approx. $250.00.
8.
Land Transfer Tax: Is the tax that must be paid to the
Province of Ontario on registration of a Deed. The rate of tax is based
on the price of the home purchased. The calculation is as follows:
-
Under $250,000: Purchase price x 1% less
$275.00
-
Over $250,000: Purchase price x 1.5%
less $1525.00
-
Over $400,000: Purchase price x 2% less
$3525.00
9.
Prepaid Expenses: (Utilities, gas, taxes). These are
expenses that the seller has prepaid that they must be compensated for.
This amount will be reflected in the statement of adjustments that you
receive from your lawyer.
10.
Mortgage Insurance: (CMHC - Canadian Mortage and Housing
Corporation). When you need a loan that is more than 75% of the
purchase price of the home, mortgage loan insurance is required to
protect the lender. It essentially means you can buy a home for as
little as 5% downpayment. For a home of $125,000 you will only need to
put down $6250.00, the premium will will have to pay on this is 3.25% of
the loaned amount or 3859.38 which will be added to the mortgage total.
For Example: $125,000(purchase price)-$6250(downpayment) =
$118,750(loan amount) x 3.25% = $3859.38. Therefore total mortgage amt
is $118750+$3859.38 = $122,609.37.
11.
PST on CMHC premium: From our example that is $3859.38 x 8%
= $308.75.
12.
CMHC application fee: It ranges from $75.00 to $235.00.
13.
Interest adjustment: Monthly mortgage payments are due
on the 1st of the month. Unless the closing date is the 1st, you must
repay the amount of interest accruing up to the 1st day of the following
month, which is the Interest Adjustment Date. For example if the
closing date is March 15th but, the IAD is April 1st, interest from
March 15th to the 31st must be paid.
As you can see your closing costs alone
can be quite high so make sure you factor this in before when you are
looking into moving
