Closing Costs
        ……all you need to know
 
When purchasing a new home or condo, there are several additional expenses that must be taken into account. Certain items are imposed by the government, certain are required by lending institutions and others to ensure clear title to the resale home or condo that you buy. We recommend our Buyer clients budget up to 2% of the purchase price of the home or condo to cover these various items. These can vary depending on the situation, but typical costs include:
 
Survey - Usually the Agreement of Purchase and Sale will have a clause asking the Seller to provide a survey to the Buyer at their cost within an agreed timeframe. If the Buyer does not provide an acceptable survey it may be necessary to obtain a new survey. Approximate cost: $60 - $1000. In most cases however, the survey is available.
 
Title Insurance - This insurance can eliminate the requirement for a new survey. Title insurance is an insured statement of the condition of title or ownership of real property, at the time the policy is issued. Approximate cost: $250-275 (residential) Lawyers invariably take out title insurance of most transactions.
 
Land Transfer Tax - This is payable on all purchases. The tax is calculated on the purchase price of a home according to a specific formula - click here to go directly to the land transfer tax calculator
 
Legal Fees - Legal fees will vary according to the lawyer. Approximate cost: $400 - $700 Excluding Disbursements.

Disbursements - Disbursements are costs that the lawyer will have to pay on your behalf, such as searches, registration fees, photocopies, etc. Approximate cost: $600 to $800.

Home Insurance - Premiums will vary from insurance company to insurance company and according to your insurance needs. In a condominium however, this is included in your maintenance fees and does not form part of the closing costs, unlike a house purchase. Approximate cost: Varies
 
Mortgage Application - Your lending institution may charge a fee for processing your mortgage application. Approximate cost: Varies
 
Mortgage Appraisal - Approximate cost: $200. This may be negotiable.
 
Home Inspection – It is recommended that Buyers have a home inspection performed to identify any significant structural, electrical or plumbing problems with the home. It is a requirement of some lending institutions that you have a home inspection completed before approving financing. Approximate cost: $350 - $450 tax.
 
Status Certificate – When purchasing a condo, you should request a Status Certificate as it provides detail on the Condo Bylaws, Rules and Regulations, as well as Finances. Any Ensuite restrictions or common element restrictions are also detailed in the Status Certificate. Most importantly, it includes information on the condo's Reserve Fund, which is the amount the condo corporation has set aside to cover unexpected expenses. The Status Certificate is usually paid for by the Seller. Approximate cost: $100.
 
CMHC Insurance Premium - Only applicable if your downpayment is less than 20%. There is an option of adding the premium to your mortgage and amortizing it over the term of your mortgage. In the latter case, it does not form part of your closing costs as you will pay it over the term of the mortgage. If you are intending to put less than 20% as a downpayment click here to calculate how much your premium will be.

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