Consider Closing Costs When Buying A Home
February 16th, 2012 | 
Author: Consider Closing Costs When Buying A Home
Buying your first home is an exciting process. You determined how much home you can afford you saved your down payment you and your REALTOR found the perfect home and your offer was accepted. While the purchase price of your home is the largest cost you will encounter there are other costs to prepare for when buying a home.
It’s a good idea to budget some extra cash to cover the cost of obtaining a mortgage and “closing” your real estate transaction. Here are some of the extra cost items you should consider:
Appraisal feeMortgage lenders will usually loan a percentage of the home’s purchase price or the market appraisal of the property whichever is lower. The appraisal is either done by someone on the lender’s staff or by an outside professional approved by the lender. The cost of the appraisal is most often the responsibility of the home buyer.
Application feeFind out whether or not your lending institution charges to process your mortgage application. In many cases if you are dealing with a bank that you have other accounts with they will waive the application fee.
Land survey feeLenders require a plot plan or survey of the property you intend to buy. On properties located in subdivisions in urban areas lenders will often accept an existing survey depending on when it was done. However if there is no existing survey be prepared to pay a substantial fee for a new survey.
Home inspection feeMany homebuyers choose to have a home inspection done prior to finalizing their offer to purchase. Some lenders require a professional home inspection as well.
Legal feesYou will need to pay your lawyer to arrange your mortgage as well as for “disbursements” such as title search drawing up the title deed and preparing and registering the mortgage.
Land transfer taxThis tax is payable by anyone who purchases property in Ontario. A REALTOR or lawyer can help you calculate how much tax you will pay on your purchase.
GSTIf you are buying a new home you will be required to pay Goods and Services Tax of seven percent on the price of your home. GST does not apply to most resale homes.
InsuranceThere are several types of insurance that may be required when buying your home. If you are arranging a “highratio” mortgage less than 25 down payment you will need to purchase mortgage insurance. Mortgage lenders require you to carry fire and extended coverage insurance that exceeds the amount of the outstanding balance of the buildings. Other insurance you may want to consider include title insurance and life insurance.
Other costsYou will likely have to make property tax adjustments and interest adjustments on utility bills heating oil etc. Ask your REALTOR to explain these additional costs so you have no surprises on closing day.
Maintenance and utility costsFinally be sure to budget for heating electricity water and any immediate renovations you may have planned. It’s a good idea to put aside any spare cash and contribute regularly to a maintenance fund so you will be prepared for any repairs or upgrades you need to make along the way. Source OREA
About the writer:nbsp;nbsp;Rakesh Pabbi is Mississauga Real Estate Agent and offers services to Buy Sell and Rent property apartments homes and condos in Mississauga real estate investing Mississauga Brampton and GTA area. He provides Customize Home Search Free Home Evaluation Buyer Seller Incentives Mortgage Info First time buyer advice. Rakesh holds an Engineering degree in Electronics and TeleCommunications from India and have more than 12 yrs of experience in Information Technology field. Real estate is a competitive market where technology now plays an integral role. To be successful whether in purchasing or selling your home it is necessary to take full advantage of technological advancements. As an individual with technology background who is capable of utilizing these technical tools Rakesh Pabbi Mississauga Real Estate Agent can provides you a greater service. Languages Spoken: English Hindi Punjabi.Rakesh Pabbi Sales RepresentativeHomelife Superstars Real Estate Ltd; Brokerage2565 Steeles Ave E Unit 11 Brampton ON L6T 4L6
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