CLOSING COST & BUDGETING
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 Once you have figured out the home price range you can afford, type of mortgage you qualify for, you will need to calculate all of the associated costs of transaction to make sure you are financially ready. Besides the basic purchase price, buyers do face other additional cost on or before closing the purchase. Consider all other expenditures you may have to make over and above actual purchase cost; repairs, furniture, landscaping, and renovations, decorating and moving. Be prepared for unexpected costs such as legal and survey costs, appraisal fees, land transfer tax and be aware of increased monthly costs like water, gas, electricity bills etc., especially when moving into a larger one.
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Additional Cost You Should Know
q DEPOSIT: The deposit is part of the Purchase Price but you need it the day your offer is accepted. Toronto, 5-10% is the expected amount. Not everyone has the money in an accessible account so a split deposit - part now and the rest at a later date is often acceptable.
q DOWN PAYMENT: At least 5% of the purchase price is usually required for a high-ratio mortgage and at least 25% of the purchase price is usually required for a conventional mortgage.
 q HOME INSPECTION: A home inspection has become standard in the freehold and condominium townhouse purchase. The inspection costs between $250 and $350 for most houses but increases with the cost of the house over $300,000. The companies that we recommend all charge a base price of $300 to $400
q HOUSE INSURANCE: The house must be insured prior to closing. The annual premiums are fluctuating. Many insurance companies won't insure or charge an extra premium for houses with less than 100 amps service or with the old style "knob and tube" wiring, which is present in many older homes. The insurance companies are changing the rules all the time. Shop for a good insurance broker early in the process.
q SURVEY: A survey that shows the lot dimensions and the location of any structures is good to have but is no longer mandatory to get a mortgage. Title Insurance can protect you from the problems that a survey might find. The usual cost of a survey is between $1,000 & $1,200 (occasionally more).
 q MORTGAGE COSTS: There is usually an interest adjustment calculation to adjust for the time between your closing date and the date that the mortgage company wants you to make your regular payments, usually the 1st of the month. The costs of arranging a new mortgage which can include application and appraisal fees. and CMHC premium etc., based on Conventional or CMHC insured Mortgage. With most second mortgages and some first mortgage too, there is a brokerage fee and/or Lender?s involved. The amount depends on the size of the mortgage. Get a firm quote.
q LEGAL FEES: You need a lawyer to search the title and cover all the legal matters. Rates vary greatly, starting at about $450.00. This amount is for the lawyer's time. In addition you must pay for the disbursements that the lawyer pays on your behalf. The disbursements are often equal to or greater than the lawyer's fee. Get a quote !
q TITLE INSURANCE: Title insurance is a standard part of your legal package and should be included in the quote from your lawyer.
q REAL ESTATE TAXES: If the Vendor has paid the City Taxes in advance, you must reimburse him. This is part of the "adjustments".
q OIL: If the property is heated with oil, convention dictates that the Seller must fill the tank for closing and then you reimburse him on closing. NB: If you are switching to gas then make sure that your lawyer and the Seller know well in advance of closing so the tank isn't filled. This is part of the "adjustments
q GST: Good news!! There is no GST payable on resale homes unless the owner has been carrying on a business in the home and applying for tax credits, in which case the GST is the Seller's responsibility.
q LAND TRANSFER TAX : The Buyer needs to pay the Land Transfer Tax as applicable, Payable on closing. Its calculation is a multi-tiered formula shown as above, It is a major expenses on closing the purchase. LAND TRANSFER TAX Payable on closing. It is a multi-tiered formula:
q CLOSING ADJUSTMENTS : Then there are closing adjustments with the seller; Realty-Taxes, rental income, condominium maintenance, and some utility charges.
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Calculate Your LTT : Land Transfer Tax
$ 5 Per thousand from $0 - $55000
$ 10 Per thousand from $55,000 - $250,000
$ 15 Per thousand from $250,000 - $400,000
$ 20 per thousand over $400,000+ ?
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Besides up-front costs, there are other expenses to consider:
q  Appliances. Check to see what comes with the house, if anything.
q Gardening equipment.& Snow-clearing equipment.
q Window treatments. Check to see what comes with the house.
q Decorating materials. Paint, wallpaper, flooring and tools for redecorating.
q Hand tools. You will need some basic hand tools for your new home.
q Moving Expenses.
q Renovations or Repairs. If any
q Service Hook-Up Fees. Charged for utilities. You may be required to pay a deposit for utilities companies such as telephone and heating services.
q Condominium Fees. You may have to make the initial payment for these monthly fees.
Avoid any surprises by having choosing me as your real estate professional, I will guide you through the necessary steps. Rely on my expert advice to keep you well informed and prepared. It's just one more way that I will starve to take the anxiety out of buying your dream home. Count on my Skills, Experience and Outstanding Performance.
You are thinking of a Real Estate Transaction, No matter what locations or budget you may have in your mind and you are interested in, we are here, a team of competent professionals, extend our expertise, connections, power and services to your benefit. You may have many questions to be answered. Please browse all the other links and respective pages to justify more facts and findings to your advantage at time of your buying or selling a Real Estate in Canada.
If You are a New Comer to Canada or First Time Buyer: CMHC-The Newcomer's Guide to Canadian Housing and Buying Step by Step are the most informative sources for New Immigrants and First Time Buyers when buying a home in Canada. Please contact me for a copy of the Guide or Download the .pdf file. Please Click: New.Immigrant.Housing-Guide + HomeBuying.StepByStep
I F Y O U A R E B U Y I N G: Please Click: Buyers_Page : Property_Buyers_Requisition
I F Y O U A R E S E L L I N G : Please Click: Sellers_Page : Property_Sellers_Requisition
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