Home Closing Costs

February 2, 2014 - Updated: February 2, 2014

Home Closing Costs

Mostly its the first time buyers who are logically more concerned with this issue. So here a quick snap of the closing costs.


Appraisal Fee
 - An appraisal provides the lender with a professional opinion of the market value of the property.  This cost is normally the responsibility of the and it can cost $300 and up. Its applicable only when asked by the lender. Its buyer who is seeking morgage and he pays not the seller.
Home Inspection
 - A professional inspection of the home, top to bottom, is for the benefit of the buyer. A home inspection can cost him anywhere from $300 - $400 and is well worth the investment.  When hiring a home inspector make sure the inspector has liability insurance just in case they overlook something.
If you are asking for one from your sales representative, its a good idea to ask for more than two names of Home inspectors.
Fire Insurance
 - Mortgage lenders require a certificate of fire insurance to be in place from the time you take possession of the home.  The amount required is generally the amount of the mortgage or the replacement cost of the home. This cost can vary on the property size, amount of coverage, the insurance company and the municipality. The cost can vary anywhere from $250-$600 annually for most properties.
Provincial Sales Tax on Mortgage Insurance
 - Insurance premium can be added to the mortgage amount, the tax must be paid at closing.
Land Survey Fee or Title Insurance Fee
- A recent survey of the property is usually required by lenders.  If one is not available the cost can range between $600 - $900 for a new survey.  In lieu of the survey most lenders today will accept title insurance which can cost considerably less.
Legal Costs and Disbursments
 - Lawyers and notaries charge fees for their services involved in drafting the title deed, preparing the mortgage, and conducting the various searches.
Disbursements are out-of-pocket expenses incurred during the process such as registrations, searches, and supplies.
Closing Adjustments
 - An estimate should be made for closing adjustments for bills the seller has prepaid such as property taxes, utility bills, and other charges.  Any bills after the closing date are the responsibility of the purchaser.  A lawyer will let you know what they are once the various searches have been completed
New Home Warranty
 - In most provinces new homes are covered by a new home warranty program. The cost to the purchaser for this warranty is approximately $600 and should the builder default or fail to build to an agreed-upon standard the fund will finish or repair the deficiencies to a maximum amount.  For more information on Ontario new home warranty visit http://www.tarion.com.
 - HST is payable on the purchase of a newly constructed homes only.  If you are purchasing a new home make sure you know who pays this, you or the builder. On the offer the purchase price will say "Plus HST" or "HST Included" and who gets any HST rebates. Many builders have included this cost into the purchase price so the buyer does not have to come up with it at closing.

Tagged with: home closing costs home closing legal fee fire insurance
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