What fees will you owe on closing day?
Buying a home can be hectic. You’re coordinating meetings, arranging for financing and the house inspection, and making moving plans – all this and more on top of your usual responsibilities. It can seem like you’re being pulled in a million different directions as you approach closing day and prepare to move into your new house.
In all the commotion it can be easy to forget budgeting for closing costs. These are fees owed on, or by, closing day that must be paid for your house purchase to be complete. Most of these fees are in addition to, and separate from, your mortgage loan (although some closing costs can be tacked onto your mortgage).
Closing costs can amount to a significant expense. Experts recommend budgeting at least 1.5% of the purchase price toward closing costs.
Team Grondin is committed to giving you all the knowledge you need to make closing smooth. Here is a rough idea of what to expect, some of the most common expenses are listed below. These expenses are approximations only – they may vary by region, and are prone to frequent changes. During the home buying process we will help you further define more precise numbers.
- Mortgage application – Typically not more than several hundred dollars. Due at the time of application.
- House inspection (optional) – $400 – $1000. Due at the time of inspection.
- Legal fees (including disbursements) – Expect to pay between $1000 and $2500 for a real estate lawyer, but cost varies depending on the extent of services provided. Due at closing.
- Land Transfer Tax – Varies by province and sometimes by municipality or city. View Land Transfer Tax rates for your region. Due at closing. Please see on-line calculator.
- Various registration fees (including deed /mortgage and governmental) – Several hundred dollars and up. Due at closing.
- Interest adjustment – Varies with mortgage amount and terms. Due at closing.
- Property tax/pre-paid utilities adjustments – Varies widely. Due at closing.
- Mortgage insurance – 1.00% to 3.25% of the principal amount of your mortgage. Due at closing.
- Property/fire insurance – Expect to pay $800 to $1500 for most properties, but it varies according to coverage level, region and property type. Due by closing.
- Title insurance – Due by closing.
- Status certificate (for condos only) – Around $100. Due by closing.
Don’t forget to budget extra funds for expenses related to moving (moving company, utility hookups) and regular housing costs once you own the home (utility bills, maintenance).