Closing Costs and Up Front Costs
How Much will it Really Cost?
Once you have determined the price range you can afford and the type of mortgage you qualify for, you will need to calculate all of the associated costs of the transaction to make sure you are financially ready.
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PST on Mortgage Loan Insurance Application Fee and Premium |
If yours is a high ratio mortgage (less than 20% down payment), you may need mortgage loan insurance. The lender will add the mortgage insurance premium to your mortgage or you can pay it in full upon closing. |
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Appraisal Fee |
The mortgage lender may require that the property be appraised at your expense. An appraisal is an estimate of the value of the home. The cost is usually between $350 and $450 and must be paid when you contract for those services. |
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Deposit |
This is part of your down payment and must be paid when you make an Offer to Purchase. The cost varies depending on the area, property and real estate environment. |
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Down Payment |
Minimum of 5% of the purchase price is required for a high-ratio mortgage and at least 20% of the purchase price is required for a conventional mortgage. |
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Home Inspection Fee |
A home inspection is a report on the condition of the home and may cost over $450, depending on the complexities of the inspection. For example, it may be more costly to inspect a home that has large square footage, one that is expensive or one where contaminants such as pyrite, radon gas or urea-formaldehyde are suspected. |
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Land Transfer Tax |
You may have to pay this provincial or municipal charge upon closing in some provinces. The cost is a percentage of the property's purchase price and may vary. Check with your lawyer/notary to see what the current rates are. |
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Prepaid Property Taxes and/or Utility Bills |
You may need to reimburse the vendor for pre-paid costs such as property taxes, filling the oil tank, etc. |
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Survey or Certificate of Location Cost |
The mortgage lender may ask for an up-to-date survey or certificate of location prior to finalizing the mortgage loan. If the seller does not have one or does not agree to get one, you will have to pay for it yourself. It can cost in the $1,000 to $2,000 range. A survey may be replaced by a requirement for Title Insurance for a lesser amount. |
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Water Quality Inspection |
If the home has a well, you will want to have the quality of the water tested to ensure that the water supply is adequate and the water is potable. You can negotiate these costs with the vendor and list them in your Offer to Purchase. |
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Legal Fees and Disbursements |
Must be paid upon closing and cost a minimum. Your lawyer/notary will also bill you direct costs to check on the legal status of your property. |
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Title Insurance |
Your lender or lawyer/notary may suggest title insurance to cover loss caused by defects of title to the property. |
Up-Front Costs
It’s wise to plan ahead to cover the many ‘up-front’ costs of buying a home. Timing is important to help make sure things go smoothly.
Costs at time of purchase
|
Home Inspection fee $450 - $550 |
$ |
|
Water Quality Inspection (water potability test) |
$ |
|
Deposit (as per your purchase & sale agreement) |
$ |
|
Appraisal Fee $350 - $450 |
$ |
|
Total |
$ |
Costs at time of closing
|
PST on Mortgage Ins premium |
$ |
|
Down payment (less your deposit) |
$ |
|
Land Transfer tax (calculate on our mobile app) |
$ |
|
Prepaid Property taxes (if applicable) |
$ |
|
Title Insurance (if required or desired) |
$ |
|
Legal Fees and Disbursements |
$ |
|
Total (this is the amount you will need to bring to your lawyer) |
$ |