Extra Costs

You save for a down payment and assume this can all be applied towards the purchase price of the home you are buying. Have you thought about legal fees, disbursements, registration costs and land transfer tax? You may be surprised at the variety of other costs that must be paid up front. Some costs are almost always unexpected.

The more common costs, which vary by province, include:

• Lawyer fees
• Fees for the registration of deed and mortgage(s)
• Mortgage processing fees
• Mortgage insurance and application fee (if you have a high ratio mortgage—see Glossary of Terms)
• GST (on vacant land, commercial properties, legal fees, adjustments, disbursements, and on newly constructed homes.  GST in this case is usually compensated in part by the GST rebate – your lawyer will be able to verify if you will be charged GST on these items
• Adjustments for:
  • property taxes
  • utility costs already paid by the existing owner
  • heating costs (oil or propane tank)
  • common expenses (condominiums only)
  • current and prepaid rent (income properties only)
• Connection charges for utilities such as gas, electricity and water
• Land Transfer tax—a fee paid to the municipal and/or provincial government for the transferring of property from seller to buyer.
• Search of Title—your Lawyer will search the history of your property including previous owners, existing mortgages, existing easements, subdivision agreements and rights of way to ensure that you obtain clear and unencumbered ownership to your new home, subject to any new mortgage(s) you arrange
• Home Inspection (if desired)
• Moving expenses
• Appliances, furniture, draperies, and gardening equipment
• Landscaping
• Decoration
• Repairs

Generally, you can expect your closings costs to range from 3-5% of the sale price of your new home. Closing costs and the remainder of your down payment are usually due a couple of days before your actual closing date and the payments are made directly to your lawyer. If you have any questions regarding estimates of these costs, The Renaud Otten Team can provide you with the required information.