The down payment is not the only cost when buying a home. There are a number of other expenses or “closing costs” that you will have to consider. This purchase price checklist outlines costs you can expect when buying a home.
Appraisal Fees
Sometimes an appraisal may be required by the lender and is always required on private sales. Appraisal fees range from $235.00- $450.00.
Downpayment
Is the amount paid upfront with balance of the purchase price being made by the mortgage. It is important not to spend your down payment, your lawyer will advise you of the balance of your closing costs prior to the possession date!
Home Inspection
A report commissioned by a property owner or purchaser, usually to verify the condition of a property prior to the “firming up” of a purchase agreement. The scope and detail may vary, but most reports outline any particular problems and associated repair costs. Unfortunately, no licensing is required, and this service is not specifically regulated other than by general consumer protection legislation. We can provide you the names of a few trusted home inspectors that we have recommended to our clients.
Insurance- High ratios Insurance
Must be purchased if you are buying a home for less than 20% down. A sliding fee scale applies, depending on the percentage of the purchase price required in a first mortgage (some minor exceptions). There are three mortgage insurers in Canada. CMHC, Genworth, and Canada Guaranty.
Interest Adjustment
If you arrange to make your mortgage payments monthly on the first day of the month, and your mortgage closes after the first day of the month, your lender will charge you interest on closing to the next day you make your payment this is called the Interest Adjustment Date (IAD), when your next payment cycle will commence. This can be a larger amount, but it is the correct interest you should pay. For example, close on June 15th, you would pay 15 days interest on closing and you 1st full monthly payment would start on August 1st.
Lawyer’s Fees
Although fees vary across right across the country, it may cost you up to $1,200 depending upon whether you are re-mortgaging your existing home or buying new home. Please contact us, we can give you a few names of lawyers we have worked with for serveral years.
Land Survey
The legal written and/or mapped description of the location and dimensions of your land. The survey should also show the dimensions and placement on the lot of any structure, including additions such as pools, sheds and fences. An up-to-date survey is often required by a lender as part of the mortgage transaction. Title Insurance generally covers the requirement of a Real Property Report.
New Home Warranty Program- New Homes Only!
A third party (provincial) warranty program between a builder and a buyer. Membership in such a program is required for the builder. Through these programs, your home is guaranteed against defects for at least one year. All homes with a high-ratio insured mortgage (greater than 80% loan to value) must have New Home Warranty in Alberta.
Property Tax
If the previous owner prepaid property taxes, there will be credited the prepaid portion on closing. If they paid all their taxes by April, expect a large adjustment cost on closing!
These are fees paid to the provincial government for recording a title transfer, mortgage registration or other instrument such as an Assignment or Lien with the local authorities. This is done by the lawyer and is included as part of your legal fees.
Tax Certificate
Obtained by your lawyer at the time of sale to confirm that local taxes have been paid up to date. If they are not up to date, the seller is required to pay them from the proceeds of the sale. If there are insufficient proceeds, then you may be legally required to pay the outstanding taxes. If, on the other hand, taxes have been prepaid, you may have to compensate the seller for them.
Title Insurance
Title insurance can be purchased by home buyers to protect against potential deficiencies in a number of areas, such as the land survey. There are numerous benefits to this product, and you should consult your lawyer or me today with any questions you may have.
Costs may vary from province to province.
Utility Adjustment
If the previous owner has paid or pre-paid utility’s there will be credited the prepaid portion on closing.
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