Buyer Closings Costs
To help you budget,
here is a list of the most common
closing costs a typical homebuyer
will encounter:
A pre-purchase inspection of the home to check for problems is highly recommended for any house over five years old. Make sure to use qualified inspectors who have insurance against errors and omissions.
• Appraisal fee, $325:
Cost of this service is usually to benefit the lender and is generally not borne by the purchaser. An appraiser will provide the lender with an opinion on the market value of the property.
• Legal fees, $800 to $1,200:
Charges for legal or notary services such as a title search, preparing the mortgage, transferring the property and disbursements.
• GST:
Purchasers usually are liable to pay the GST on the purchase price of a newly constructed house. Some sellers include GST in the purchase price.
• Closing adjustments:
Fees and expenses the seller may have prepaid to be reimbursed by the buyer, such as property taxes and utility payments.
• Property/ Fire Insurance:
All mortgage lenders require proof of property and fire insurance before you take possession of the home. The cost varies depending on the property covered. Rates can also depend on the insurance company used and municipality where the residence is located.
• Mortgage insurance and application fee:
On a high-ratio insured mortgage (with down payments less than 20%), the mortgage insurer, CMHC or GE Capital, will charge a fee for the application as well as require an appraisal. Costs vary - make sure you ask about it when speaking to your Mortgage Broker.
• Interest adjustment:
Banks charge interest accrued between the closing date and the scheduled mortgage payment. This is due on the Interest Adjustment Date. Usually calculated by the financial institution.
• Utility hook-up charges:
Different utilities, such as gas, electricity, cable and telephone, charge a hook-up fee for new customers.
• Moving costs:
Costs vary depending on if new owners do it themselves, rent a truck or hire professional movers.