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Buying a home is more than just the purchase price and hiring movers. There are a series of additional fees that come along with homeownership that you need to be prepared for. Ensure that you are financially ready for the huge investment of owning a home.
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What Are Mortgage
Closing Costs?

Mortgage Closing Cost are a series of additional costs in addition to the purchase of your home. These expenditures will likely account for 1.5%-4% of the homes total cost. As an example, if you are spending $810,000 on your new home, expect your closing costs to be anywhere from $12,150 - $32,400. In most cases, closing costs are due upon the official transfer of property from seller to buyer. There are times however, when some or all would be due before the closing date.

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How much money should I have to prepare for closing costs?

Home buyers often make the mistake of not accounting for just how much closing costs they should allot for. They can quickly add up so it’s a good idea to expect to have an extra 1.5-3% of the total purchase price of the home on hand.

Closing costs explained

Ensure that you have taken the time to fully understand what closing costs are, and how quickly they can add up. There are multiple additional fees involved with purchasing a home so take care not to overlook them.

Understanding the Additional Closing Costs Factors

Buying a home is an exciting time and comes with a great deal of thought, research and organization. Saving money for a downpayment and qualifying for an affordable mortgage rate is just the beginning, however. Mortgage closing costs also need to be carefully considered and prepared for during your home ownership journey. Closing costs can add up quickly and a common mistake that home buyers will make is not accounting for these costs.

Ensure that you are well informed and financially ready for the following:

Land Transfer Tax

Similarly known as tariffs, provincial and municipal taxes deed registration, land registration, or property transfer.

Real Estate Lawyer

Lawyers play an important role in ensuring that everything on paper is correct and timely. They are responsible for preparing the mortgage, performing the title search and drafting your deed.

Property Insurance

It’s wise to consult with an insurance broker for your property and fire insurance. You must at the very least have this coverage to protect the replacement cost of your home and the contents within it.

Title Insurance

This insurance protects you against real estate title fraud and against loss obtained by the defective title of the property itself.

Appraisal

This is important. Many people make their offers contingent on a home inspection. This way you aren’t moving into a home that’s going to wind up costing you far more than you expected.

Post Move Costs

Don’t forget to account for those additional miscellaneous expenditures such as mail redirecting, utility hookups, new appliances and tools.
Projected Cost - Ranges considerably, but expect to budget around $1,000 to $2,000

Moving Costs

If you can do the majority of the move yourself with the lighter items such as clothing, kitchenware, bedware, decorative items etc, you can save a considerable amount of money. However, for the larger items, you may have to hire a professional mover.
Projected Costs - Expect to spend around $2,000 for a moving company

Estoppel Certificate Fee

Also commonly referred to as Condo Status Certificates, this document will be required by your lawyer to complete the final transaction of your purchase. It will indicate the maintenance fees for your unit, the reserve funds and whether or not the seller's payments were up to date.
Projected Costs - $100-$200

Mortgage Default Insurance

You will be required to purchase mortgage default insurance if your down payment was less than 20%. Typically, this amount will be added to your mortgage, but you also have the option to pay in full when you close.
Projected Costs - Expect to spend anywhere between 0.6% to 6.5% of the total loan amount.

Prepaid Property Taxes and Utility Bills

If the seller has prepaid their property taxes, utility bills and other costs, that amount will have to be reimbursed by the buyer. Your real estate lawyer will calculate those costs.
Projected Costs - Expect to pay $1,000-$2,000. This will be payable to your lawyer.

Water Quality Inspection

This is especially important if the home's water supply comes from a well. These costs can vary from just a well inspection.
Projected Costs - $250-$550 for a well inspection and increases to $400-$650 if it’s a well and septic tank inspection.

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