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Home Buyers’ Cost


 

 

Buyer's Closing Costs

 

Home buying closing costs are the charges your lawyer asks you to pay on the closing date of your home. Many people don’t know about additional costs, over and above the purchase price of the home. You should have around 1.5% of the purchase price for closing costs.

 

List of Buyer's Closing Costs

 

Below you will find a brief explanation of these costs. (Please note these are some of the closing costs you may encounter depending on your specific situation.  Use this as a guideline then talk with your lawyer who can provide a more realistic estimate for your situation.)

 

1)  Land Transfer Tax

 

A -  Ontario Land Transfer Tax  

Ontario charges a provincial land transfer tax .This tax is levied on properties changing owners, and has to be paid by the buyer. Land transfer tax is based on the purchase price and depending on where you live. First time home buyers who purchase a new or resale home get a refund of up to $2000.

B - Municipal Land Transfer Tax 

In addition to the Ontario Land Transfer Tax , It will be applied just to purchases on all properties in the city of Toronto ( you dont need to pay for properties located out of the city of Toronto)   . The first time buyer is entitled to a rebate up to a maximum amount of $3,725.  

 

2) Home Inspection

You should have a home inspection prior to buying a home. A  Inspector identifies any significant structural, electrical or plumbing problems with the home and provides you a complete property report. When hiring a home inspector makes sure the inspector has liability insurance. The cost of a typical home inspection is between $300 and $600.

 
3 ) CMHC Insurance Premium

Mortgage default insurance (CMHC) is mandatory if you are putting less than 20% of the purchase price as a down payment. Mortgage default insurance, protects lenders if a home owner defaults on their mortgage. You have the option of adding the premium to your mortgage and amortizing it over the term of your mortgage. Mortgage default insurance costs home buyers from 1.75% to 3.15% of their mortgage amount ( It is not a part of your closing costs that pays from your pocket and you will pay it over the term of the mortgage)

 

4)  Mortgage Insurance Tax

Those looking to purchase a residence in Ontario are required to pay a tax on insurance. The current rate of insurance tax, as of April 2011, is eight percent. This tax will be assessed and levied on mortgage and home insurance, and will need to be paid before closing.

 

 

5 ) Legal Fees and Disbursements ( Lawyer Fee )

A lawyer or notary will charge a fee for their professional services involved in drafting the title deed, preparing the mortgage, conducting the various searches and disbursements costs ( lawyer will have to pay on your behalf, such as registration fees, photocopies, searches, supplies etc., plus G.S.T)

( cost: $1000 to $ 1500 vary according to the lawyer ).

 

6 )  HST

HST applies to the purchase price of newly constructed homes only. You make sure who pays HST If you are purchasing a new home

 

 

 

Cash Needed

How much extra cash will I need when my house closes?

  Consider : (Asking Price $350,000) 

Type of home:  Condminium

10% Down

 

Down payment                                    $35,000

PST on mortgage insurance              $589

Land Transfer Tax

A ) Property Located In Toronto:

If you are first time Buyer, you pay   $1,725

If you are not first time Buyer            $6,950

B ) Property Located out of the City of Toronto

If you are first time Buyer, you pay   $1,725

If you are not first time Buyer            $3,725

Lawyer fees ( Including all Fees )      $1,300  Apx

                   

Other Cash Need

 

Home inspection fees                       $300 - $500

Appraisal fees ( If Bank Request )   $300 - $ 500

 

 

 

 

 

 

 

Mortgage type    2.95%      2.95

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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