Additional Costs in Purchasing a Home
In the book Mortgage Smarts, the closing costs are listed as a very important part of the equation to the additional costs in purchasing a home that some buyers might not be aware of.
Below the book provides a sample of what closing costs may be involved, so you are informed and can budget with confidence.
(Sale Price $420,000)
|Down Payment (including deposit)||$50,000.00|
|Mortgage Insurance*||$ 9,250.00|
|Title Insurance*||$ 300.00|
|Mortgage Processing Fee||$ 175.00|
|Property Transfer Tax (in some provinces)||$ 6,400.00|
|G.S.T./H.S.T. (in some provinces)||$|
|Legal Fees and Disbursements||$ 1,200.00|
|Property Insurance||$ 900.00|
|Building Inspection||$ 375.00|
|Property Tax Adjustment||$________|
|(Note: this is a sample only)||TOTAL $69,000.00|
Mortgage Smarts suggests that you allow for:
all the costs of buying a property and arranging financing when you are budgeting for your home purchase.
In addition to the down payment, legal fees, default insurance and mortgage fees there are a number of costs associated with buying a home that you need to be aware of. G.S.T. (General Sales Tax) or H.S.T. (Harmonized Sales Tax) or B.S.T. (Blended Sales Tax) is charged on new construction of substantially renovated homes.
Lenders, therefore, require that you budget for 1 ½% – 4% of the purchase price to go towards closing costs.
When you are looking at your purchase price offer and your pre-approved mortgage ability to finance, take the time to add in your estimated closing costs based on the table above; realizing of course that costs and percentages will vary across the provinces of Canada for the various products.