To avoid any surprises on closing, here
is a list of what to expect as far as closing costs:
1. The Deposit - Part of your
down payment, a deposit is due upon acceptance of your offer.
2. Home Inspection - Prepared
by a qualified inspector to assess the property for defects and poor maintenance.
.
3. Appraisal - Prepared by an
appraiser chosen by the lender, or by CMHC/GE if the mortgage is insured.
4. Legal Fees/Disbursements -
Your lawyer will quote his fee for closing the purchase and mortgage plus
an approximation for his disbursements, which includes registration fees,
courier costs, photocopies, etc. Ask for an estimate.
5. Land Transfer Tax - Due on
closing ad reflected in the Statement of Adjustments which your lawyer prepares
prior to closing day. Up to $250,000 Multiply 1% x Purchase Price Minus $275.00
The tax calculation changes for higher purchase prices.
6. Interest Adjustment - Monthly
mortgage payments are due on the first of the month. Unless the closing date
is the first of the month, you must prepay the amount of the interest accrued
up to the 1st day of the following month. This amount is due on closing day.
7. CMHC/GE Premium PST - If your
mortgage is insured by either CMHC or GE Capital, the premium is subject
to 8% PST, and is due on closing.
8. Property Tax Holdback - If
the lender is collecting and paying property taxes, you may be required to
pay the lender an amount to ensure sufficient funds are available to pay
the next installment of property taxes when due.
9. Prepaid Expenses - If the
vendor has prepaid any other expenses such as utilities, water and sewage
taxes, or property taxes, they are entitled to a refund of these overpayments.
This will be reflected as an adjustment and your lawyer will be responsible
to advise you of this.
