Are you ready to purchase your home? This information can be really useful for the first time home-buyers. Do not forget about the closing costs. It is difficult to tell an exact amount, but rough estimation will be 1.5-2% of your purchase price. This amount will cover the following:
- Ontario Land Transfer Tax. The biggest chunk of the closing costs. The amount of this tax depends on a purchase price. If you are a first time buyer, you will get a break from this tax.
- Lawyer’s fees. They include not only fee to your lawyer, but also disbursement and government registration costs. As average, a buyer will be paying around $1,500 in legal fees.
- Title insurance. Protects a buyer against many problems that may arise after the purchase. It cost around $300 for an average home.
- Home insurance. If you mortgage your home, lenders will require a proof of this type of insurance before they forward you the funds on closing day.
- Appraisal fee. It is a legal requirement from lenders to have a property appraised before funds are released to buyers. Costs vary, typically about $300-$500, and depend on the uniqueness and complexity of the property. In some cases, lenders waive this fee, so a buyer has to negotiate with his bank.
- Moving costs. It can be a major cost as well.
- Home inspection. It will identify any structural, heating, plumbing, ventilation flows that the home may have. Costs vary, but usually about $400-$500.
- Status Certificate cost. Usually $100. Sometimes paid by the seller. This type of cost applies to condos only.
RECO (Real Estate Council of Ontario) has created a special online guide that talks about the unique issues faced by first-time homebuyers. You can find it at http://www.reco.on.ca/buyer-seller-news/understand-the-full-cost-of-buying-a-home/