Costs Involved in Buying a Home

Costs Associated with Buying a home.


Appraisal Fee:  The appraisal fee is normally the responsibility of the borrower and is for the purpose of lender’s appraisal of the property to determine current market value.  The costs may range from $100-$250 plus HST. Your bank will advise you and or incorporate into mortgage.


Home Inspection Fee:  A home inspection is something any prudent home buyer will do when buying a property (with the exception of new homes).  Home Inspection is a benefit to the buyer and is therefore a cost that is assumed by them.  It can range from $350-$650 plus HST depending on the size and type of home.


H.S.T:  If your mortgage is CMHC insured there is 13% HST payable on closing on the CMHC fee.  While the CMHC fee may be added to the sum of the money borrowed the HST must be paid upon closing.


Survey Fee or Title Insurance:  Some lenders may require a recent survey of the property, If one is not available, the cost to have a new survey is normally between $700-$1,100 dollars.  In lieu of a survey, Title Insurance is now recommended and in some cases only requirement acceptable from some lenders. Most Lawyers have now packaged the Title Insurance into the other required disbursement charges.


Legal Costs:  A Lawyer will charge a fee for their professional services involved in drafting the title deed, preparing the mortgage, and conducting the various searches.  The disbursements on the other hand, ie; out-of-pocket expenses incurred, such as registrations, searches, supplies, plus H.S.T on these services. You should Cost approximately $525-575 for disbursements and $400-$600 for your Lawyer’s fee, depending on the Lawyer you choose.


Land Transfer Tax:  In Ontario the land transfer tax is calculated as follows:  0.5% on the first $55, 000, 1.0% from $55, 000-$250,000, 1.5% from 250,000-$400,000 and finally 2% on any amount over $400,000.  First time home owners are eligible for a refund of up to $2,000.00.


Utility and Property Tax Adjustments:  Closing adjustments for bills that the seller has prepaid such as property taxes, utility bills, and other charges will be prorated.  Any bills after the closing date are the purchaser’s responsibility.  Your lawyer will let you know what they are exactly once the various searches have been completed.


Mortgage Application Fee:  Speak with your lender to determine what your mortgage application fee will be.  A conventional mortgage fee will be much lower then a mortgage which is CMHC insured.


H.S.T.: On the purchase of a newly constructed home, HST is payable, but make sure you know who pays this, you or the builder.  Therefore, on the offer, the purchase price will say “Plus HST” or “HST Included”, and who gets the HST new home rebate.  A lot of builders have included this cost into the purchase price so that the buyer does not have to come up with that at closing.  (As well, this tax is also charged on all professional fees).



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