Closing CostsClosing costs you should include in your budget outside of the mortgage cost and the best mortgage rates. Closing Adjustments - Condo maintenance fees, if applicable, Municipal property tax, Utilities (such as heating, hydro and water) Real Estate Appraisal Fees - Appraisal of property is to confirm market value before finalizing and are for conventional mortgages. Most lenders cover this cost or fees are covered if you are getting mortgage default insurance. Some reasons for an appraisal are to obtain a loan, insurance, lower tax burden, settle an estate, to negotiate, determine a price, protect your rights and may be required by Canada Revenue. To get an estimated market value for a property, you can get a value at Zoopraisal for free. Although just an estimation, it may be a good way in determining the price of a home based on similar properties nearby and also gives additional information such as detailed neighbourhood demographics. Land Transfer Tax - At times generally the biggest portion of closing costs on re-sale home; Land Transfer tax is charged to purchaser with property changes ownership. Interest Adjustment - You will need to pay any interest accrued between your closing date and your first scheduled mortgage payment and to be paid on the Interest Adjustment Date. Title Insurance Fee - Title insurance will help assist in ensuring that the closing is not delayed due to defects in title and other risks. See last week's blog for more information. Home Inspection Fee - Could be a requirement of mortgage loan and recommended before finalizing offer to purchase as it could reveal areas where repairs are required. Property/Fire Insurance - Proof of insurance due on closing date and to cover replacement value of home and contents. See last week's blog for more information. Other Costs That May be Applicable
Septic Tank - Testing fees to ensure in proper working order. Estoppel Certificate Fee (not applicable to Quebec and sometimes referred to as status statements or acknowledgments). Required only if you are purchasing a condo, strata unit or commercial unit. The Estoppel Certificate outlines a condominium corporation's financial and legal state of affairs. Note: Not applicable to all PurchasersWhen the time comes, these are items you will want to discuss in detail with your Mortgage Broker and some items with your Lawyer. Continuation of Things to Consider When Purchasing a Home – Part 2. Make sure you check back next week when we continue our blog, Things to Consider When looking to Purchasing a Home Part 3 where we discuss Moving Costs. See you next week!