Costs Involved In Buying A Home

No one likes unwelcome surprises! Keep in mind the "closing costs" in addition to your down payment for that dream home. These various charges can add up and for the most part they are all legally required payments in buying a property.

These payments include:

APPRAISAL FEE: The money you borrow for your mortgage is usually a percentage of the home's purchase price, or of the market appraisal - whichever is lower. The lender will use someone on staff or an independent professional to make this appraisal. You are normally responsible for this cost.

LAND SURVEY FEE: A plot plan or survey of the property you want to buy is important to establish exactly where the boundaries are and make sure there are no encroachments such as part of your neighbor's house or garage, sitting on your land. Your lending institution will want to see such a survey and can let you know what their requirements are.

LEGAL FEES: Since a lawyer or notary public is an essential part of your home-buying team, the work provided involves legal fees. Most legal fees include searching the title of a property, arranging a property survey if necessary, and handling other disbursements as required.

MORTGAGE INSURANCE AND APPLICATION FEE: for any high ratio mortgage, which is any mortgage in which 75 percent or more of the house's purchase price is covered by the mortgage, the lender requires mortgage insurance.

PROPERTY INSURANCE: This insurance covers the replacement value of your home and its contents. Most mortgage lenders will require proof that you have this insurance before processing a mortgage.

HOME INSPECTION: A professional home inspector knows what to look for and can confirm or add to the information you have gleaned from the sales information or your inspection.

PROPERTY TRANSFER TAX: This provincial tax is payable at the rate of .05 per cent on the first $50,000 of the fair market value of the property, plus 1 percent on the fair market value over $100,000, plus 1.5 percent on the fair market value over $150,000 plus 2 percent over $200,000

GST: GST is payable to some degree on the purchase price on all new homes, although partial rebates are available on the purchase of most homes. A resale residential home is usually exempt from GST.

HOOK-UPS: There may be hook-up charges required for appliances and services such as telephone, cable, hydro and other utilities.

MOVING COSTS: Don’t forget the basic costs involved in moving from your old place into your new home, particularly if you use a professional moving company.