You’ve saved enough money for your down payment and have been preapproved for a mortgage but now what? Before you go ahead and purchase your dream house, you need to be aware of the hidden closing costs in Ontario which could impact your home buying budget. Having enough money to cover all the closing costs and hidden fees you might not have considered will make for a smooth closing with no surprises.
Typical Closing Costs in Ontario:
- Home Inspection – If the home you’re purchasing isn’t brand new, a home inspection fee will cost around $500. The home inspector goes through each room of the house to evaluate the structures and its condition. You’ll get a written report with the findings and what the costs to any repairs would be when the inspection is complete.
- Property Appraisal – Your mortgage lender might require a property appraisal be completed so that they can verify the value of a property before giving you a mortgage. Depending on where home is located and how large it is, this fee will cost about $175-$285.
- Land Transfer Tax – When a property is transferred to your name, it is taxed depending on the price of home and what city it is located in. If you are a first time home buyer, you might be exempt for this cost, depending on where you live.
- Mortgage Insurance – This type of insurance can protect you if you default on your mortgage payments or even pay off a part of your mortgage (to a maximum of $500,000) to protect your family in the case of an unexpected death of you or your spouse.
- Home Insurance – This insurance is specifically for your home and what’s inside of it. The approximate price of home insurance is $450 per year but you might be able to get a lower rate if you bundle your various types of insurance together (like life and auto).
- Prepaid Property Taxes or Utility Bills – If the previous homeowner has prepaid their property taxes or utility bills, you will be required to reimburse them for the amount of money they have paid. The cost of this varies from homeowner to homeowner.
- Legal Fees – Lawyers provide services to help you draft the title deed, prepare the mortgage and more. Lawyer fees vary by province and are always subject to GST and HST. Make sure the quote from your lawyer includes all possible related expenses. It’s a safe bet to budget $1,500-$2,000 for your lawyer fees.
As you can see, the closing costs for each buy varies on a lot of different factors. It’s best to take a close look at the property you’re buying and ask your realtor to give you a realistic amount of money to budget for.
Have more questions about closing costs or looking for a realtor to guide you through the process? Contact me today at 519-222-1540 to learn more.Posted by Greg Dewar on