| Closing
Costs to Consider
What fees will you own on closing day?
Buying a home can be hectic. You’re coordinating
meetings, arranging for financing and the house
inspection, and making moving plans - all this
and more on top of your usual responsibilities.
It can seem like you’re being pulled in
a million different directions as you approach
closing day and prepare to move into your new
house.
In all the commotion it can be easy to forget
budgeting for closing costs. These are fees owed
on, or by, closing day that must be paid for your
house purchase to be complete. Most of these fees
are in addition to, and separate from, your mortgage
loan (although some closing costs can be tacked
onto your mortgage).
Closing costs can amount to a significant expense.
Experts recommend budgeting at least 1.5% of the
purchase price toward closing costs.
To give you a rough idea of what to expect, some
of the most common expenses are listed below.
These expenses are approximations only - they
may vary by region, and are prone to frequent
changes. Your Royal LePage real estate agent can
help you further define more precise numbers.
- Mortgage application - Typically not more
than several hundred dollars. Due at the time
of application.
- House inspection (optional) - $200 and up.
Due at the time of application.
- Legal fees (including disbursements) - Expect
to pay between $1000 and $2500 for a real estate
lawyer, but cost varies depending on the extent
of services provided. Due at closing.
- Land Transfer Tax - Varies by province and
sometimes by municipality or city. Due at closing.
- Various registration fees (including deed
/mortgage and governmental) - Several hundred
dollars and up. Due at closing.
- Interest adjustment - Varies with mortgage
amount and terms. Due at closing.
- Property tax/pre-paid utilities adjustments
- Varies widely, but often under $1,000. Due
at closing.
- Mortgage default insurance - 1.00% to 3.25%
of the principal amount of your mortgage. Due
at closing.
- Property/fire insurance - Expect to pay $300
to $700 for most properties, but it varies according
to coverage level, region and property type.
Due by closing.
- Title insurance - Around $200. Due by closing.
- Estoppel certificate (for condos only) - Around
$100. Due by closing.
Don’t forget to budget extra funds for
expenses related to moving (moving company, utility
hookups) and regular housing costs once you own
the home (utility bills, maintenance).
Royal LePage sales representatives are your
residential real estate experts. For helpful advice
about buying a home in your area, contact
Korinne Peachey from your local Royal LePage
real estate office.
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