Buyer Closing Costs
The total cost of buying a home/condo involves not only the down payment and purchase price of the property, but also other closing costs, which are over and above the purchase price. These expenses are incurred by the buyer and are necessary to complete the purchase transaction. Your lawyer will request a cheque for the closing costs a few days prior to the Closing Date when you go into the lawyers office to sign all the paper work.
These Buyer Closing Costs include:
Lawyer’s Fees (due on closing + HST)
Lawyer’s legal fee, Disbursements, Title Insurance, Registration of deed and Registration of mortgage, Adjustments for property tax, utilities, condo fees, etc.
Land Transfer Tax:
The actual formula for calculating LTT is:
1/2% of the first $55,000 of the sale price
1% from $55,001 to $250,000
1 1/2% from $250,001 to $400,000
2% on any amount above $400,000
1st time home buyers get a $2,000 rebate
(If purchasing in the City of Toronto there is an additional Toronto Land Transfer Tax)
Property Tax Hold-back: (pro-rated adjustment) If the lender is collecting and paying property taxes you may be required to pay to the lender an amount to ensure sufficient funds are available to pay the next installment of property taxes when due. Ask your lender, or mortgage person about this. (due at closing)
Prepaid Expenses: If the Vendor has prepaid any other expenses such as utilities, water and sewage taxes, oil in tank or taxes, he/she must be compensated. This will be reflected in the Statement of Adjustments.
Mortgage costs, fees or administration or Mortgage Insurance.- Mortgage application fee (due at time of application), property appraisal fee (due at closing), property survey (due at closing), mortgage interest adjustment (due at closing), mortgage assumption fees (if applicable)
Mortgage payment - pro-rated adjustment for the month
Down payment - The down payment is a combination of your deposit along with the remaining dollar value of funds that make up the difference between your purchase price and the amount of mortgage on the property you are buying, payable to the Seller on closing. The total of your mortgage, your down payment and your deposit should equal the total selling price.
CMHC Insurance
High ratio mortgages must be insured through CMHC (Canada Mortgage and Housing Corporation) or GENCOR (G.E. Capital Corporation). These Insurers guarantee the risk of lending to home buyers who need a high ratio mortgage. An insurance premium is paid by the borrower on behalf of the lender. The insurance premium that is paid to CMHC is to protect the lender in the event that the mortgage is not paid. This is not life, disability, or job loss insurance. The insurance premium is calculated as a percentage of the mortgage amount, depending on the loan to value, and may be added to the mortgage amount.
CMHC & HST: If your mortgage is insured by CMHC the insurance premium will usually be added to the mortgage so it is not a cash requirement on closing. However, the premium is subject to HST, and the tax must be paid on closing.
Home Insurance (on going) Starts on the Closing Date
Property Taxes (on going)
Home Inspection (approx. $400.00 to $500.00 plus HST) – due at the Inspection (if applicable)
Moving Expenses & Connection charges for utilities (if applicable) (due on date of move)
* These costs are estimated. Each situation will vary according to the particular circumstances.*
