The home buying process comes with many added monetary instances that you will need to budget for. These are referred to as closing costs, and they’re an often overlooked part of the mortgage process.
These fees are paid at the end of a real estate transaction when you are buying a home. In most cases, the buyer incurs closing costs, but there are occasions where the seller takes them on.
On average, here is what you should budget for when it comes to closing costs:
- Appraisal: This can range anywhere from $100 to $200. The average appraiser in Ontario will charge about $175 (plus tax) to give your home an extended once-over to make sure it’s in good shape. For custom-built homes and homes off the beaten path (like cottages and lake houses), the appraisal fee may be a little higher.
- Home Inspection: This differs from an appraisal because a home inspection involves looking at everything from the furnace to the wallpaper to the rain gutters. This fee can run you anywhere from $250 – $400.
- Fire Insurance: Depending on the size of your property, a fire inspection certificate can cost as low as $250 and as high as $600. These inspections are important because mortgage lenders require you to have the certificate in place from the moment you take possession of your new home.
- Title Insurance/Land Survey: Lenders will require one or the other. Land Surveys cost approximately $600, while Title Insurance is only about $250.
- Land Transfer Tax: The province of Ontario demands that the buyer pay a land transfer tax. The price you will pay for your land transfer tax is based on the purchase price of the home you’re buying.
- Legal Costs: These can be anything from a lawyer or notary fee to other services such as outlining the title deed and formulating the mortgage. The prices of all legal costs vary so it’s better to budget a little bit extra to make sure everything is covered.
Closing costs are unavoidable, but if you’re prepared, you won’t be taken aback when it comes time to fund them. Your broker can explain this in detail. so don’t hesitate to contact us with questions regarding closing costs or closing dates.