Closing costs refer to the fees or charges that one has to pay when the person is buying a new home. This is the additional cost that you have to pay when you finalized to buy a new home. These additional costs are the insurance fees, legal fees and taxes that one has to pay when buying a house in Ontario. This closing cost can vary from one property to another based on various factors. What are closing costs that you have to pay? Then read on to know more.
10 Closing Costs You Have To Pay
The 10 closing costs Ontario that you have to pay while purchasing a home are:
Land Transfer Tax:
This is a tax which the buyer has to pay to the province,State, County or Municipal. This has to be paid during the closure of the transaction. The amount of this tax generally depends on the amount you have paid for the land. First Time home buyer may qualify for rebates. Estimate Cost in Ontario, Canada 0.5%-2% of home's value.
Home Appraisal Fee:
This fee is sometimes covered by the mortgage lender. The home appraisal fee is the estimate on the value of the home you are buying. Estimate cost: $400
You have to pay the legal fees for the preparation, processing and recording of the official documents for your new house. A minimum of $500 along with HST or GST is charged as a legal fee. Along with disbursements, with added services as needed.
You have to a home inspection fee to the home inspector who will inspect the entire condition of the house before the property is handed over to you. This home inspector will produce a complete report on the home condition for a certain fee. The fee may depend on the complexities they have to face for the home inspection. Estimate cost: $350-450
This is another closing cost that you have to incur if you are buying a new home. This is to ensure that your property is insured from every possible cause. The amount of the home insurance depends on the property and the policy you choose. Estimate costs: $500/year
Costs For Newly Constructed Homes:
Another cost that you have to pay is the costs for the newly constructed home. This may include upgrades, as well as new homes are subject to taxes. The charge of this may depend on the constructions of the homes. Ontario estimate cost: 5% GST and 13% HST, some of these taxes may be included in original purchase price. Always confirm during negotiations.
You also have to consider prepaid expenses when you are buying a new house in Ontario. You may have to reimburse the prepaid expenses of the previous owner of the property you are buying. These expenses may include utility bills and property taxes.
Tax on Mortgage Insurance:
You also have to pay the taxes on the mortgage insurance with some upfront fees while buying a new property.
Most of the lenders will need title insurance for protecting against any loses regarding ownership dispute. This must be purchased via your real estate lawyer. The charge can be anywhere between $150 and $350.
The moving costs are the expenses that you have to bear for moving in. It can be the cost of movers, van rental, cleaning supplies and hiring a locksmith.
So, these are the closing costs when buying a property. As you can see, all these items could add up fast. Make sure you use a reliable calculator when budgeting on your next home purchase. Also keep in mind that these cost may vary from one property to another.