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My Mortgage Blog

We call these closing costs, generally estimated about 1 - 1.5% of the purchase price of your home.  These are the unavoidable costs that are the last hurdle between you and home ownership.

Deposit - due upon the acceptance of your purchase offer, a deposit is essentially a gesture of good faith between you and the seller.  A minimum deposit is usually around $5,000.  This is something your realtor will help you with.

Mortgage Loan Insurance - this is a mandatory expense for buyers who put a down payment of less than 20%.  Administered through one of the 3 insurers, the cost of this insurance depends on the amount of your down payment, and is usually added to your mortgage.

Home Inspection - real estate agent usually counsel you to make an offer conditional on the outcome of a home inspection.  An inspector will look for items that could affect the price and desirability of a home, such as outdated wiring, shabby roofing, an elderly furnace or cracks in the foundation.  The fee depends on the home's size, age and the amount of time it takes to do an inspection, but usually around $400-500.

House Insurance - Canadian law states that a home owner must have fire insurance on their property effective when they take possession.  If the home inspection turned up antiquated wiring or other problematic features, a potential insurer may refuse to cover you unless you get it fixed.  Rule of thumb - factor in all costs required to pacify the insurance company.

Title Insurance - this protects you from any unpleasant revelations about your property's history that might crop up in the future.  Unless you obtain a real property report, it is difficult to ascertain a comprehensive history of your property.  In order to deal with potential errors or omissions in the public registry or secret heirs to the land, most homeowners obtain title insurance. The fee depends on two factors:  the first is whether the property is urban or rural, title insurance costs more out in the country because there is a greater chance that the property may contain an undisclosed structure, such as a well or a septic tank.  The second factor depends on whether it's a single residence or a multi-family dwelling (such as an apartment condo); the cost is more in the latter.  This is obtained through your lawyer is about $200.

Interest Adjustment - unless you take possession the first of the month, you may have to prepay the amount of interest accrued up to the first day of the next month.  This depends on what payment structure you have chosen (monthly, weekly, bi-weekly).  That sum is due on your closing day or with your first payment, depending on the lender.

Prepaid Bills - the seller may be entitled to a reimbursement from you, if they have prepaid any bills (taxes, community association fees).

Moving Expenses - Whether you are hiring professional movers or conscripting friends and family to lug your boxes, you can expect an outlay of cash on moving day.

Service Activation - once you move in, you will inevitably have to pay activation fees for utilities such as phone, cable, gas and electricity. 

Mail Forwarding - you advised important people of your impending move but you are bound to have forgotten some.  To ensure you don't miss any crucial mail, you should get Canada Post to forward your mail from your old address.  you can sign up for this service online or at any postal outlet.

Appraisal - an appraisal may be required to determine the market value of the property you are buying.  If there are no records of similar properties, if you are buying privately of if the lender does not agree with the purchase price.   Appraisals are often at your cost and generally start around $299 and go up, depending on the appraisal company, the size and location of the property.