When you are looking at buying a home, it is hard for some people to look past the owners’ personal belongings, and some blur the lines between fixtures (items attached to the home) and chattels (personal property to leave the home with the owners). When listing a home for sale, it is imperative to be…Details
Don’t forget closing costs when buying a home
- Legal fees: In Ontario you are going to need to hire a lawyer to complete the sale of your home. Talk to your lawyer, or potential lawyers for their fees. Also make sure you are clear on what their fee will be, and also what other charges are going to happen at the lawyers office. Just because they quote their fee at one price, make sure you are clear with them what other fees will be paid when you go in to sign your documents ie. Title Insurance and Disbursements
- Mortgage insurance: For any high ratio mortgage, which is any mortgage in which more than 80 percent of the house’s purchase price is covered by the mortgage, the lender requires mortgage insurance. Most commonly you will hear about the CMHC fee. It breaks down like this: .5% on the first $55,000 of your mortgage, 1% from $55,000 to $250,000, 1.5% from 250,000 to 400,000 and 2% after that.
- Mortgage broker’s fee: Sometimes there can be a fee associated with your mortgage broker, although most times that fee is taken care of by the lender.
- Title Insurance: A charge you will see at your lawyer’s office, covering the title to your property for a lot of unknown issues such as: encroachments on your property of a fence, or building from a neighbouring property, some of your buildings or property encroaching on your neighbours property, and many other deficiencies. Not all title insurance is equal, and make sure you know what you are covered for.
- Property insurance: Your home insurance will need to start on the day of close, and it is going to cost more than your tenant insurance for only contents.
- Home Inspection: Home inspectors in the London Ontario area will run typically from $300 up to a high end of $800 when you get all the bells and whistles for extra information in the report.
- Land transfer tax: Anyone buying property in Ontario must pay a land transfer tax. It usually runs between 0.5 to two per cent of the home’s purchase price, depending on that price. This excludes first time home buyers in Ontario that get a $2,000 rebate when they buy their first home.
- HST: HST is payable to some degree on the purchase price on all new homes, although partial rebates are available on the purchase of most homes. A resale residential home is usually exempt from HST. Various other closing fees, however, do involve payment of HST.
- Disbursements: You may also be required to pay the costs of such things as heating oil in the tank, or other costs incurred by the seller, but included with the house, prior to the closing day. Property taxes, other metered utilities also show up here.
- Set Up Fees: There may be hook-up charges required for appliances and services such as internet, cable/satellite, hydro, natural gas etc.
- Moving costs: Whether you are moving yourself, or hiring professionals, there is going to be costs associated with moving. Boxes, packing materials, truck rental and of course pizza and beverages.