Mike Wallace

RE/MAX Escarpment Realty Inc., Brokerage. Independently Owned and Operated
4121 Fairview St, Burlington, L7L 2A4
Office: (905) 632-2199
Fax: (905) 632-6888

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Calculate Mortgage Payments

Buyers Closing Costs
It is important to be fully aware of all the costs involved in buying a home, preferably before you go house hunting! Knowing in advance what these additional “costs” are, over and above the down payment that you might have, will help you plan for a smooth closing and avoid any unpleasant surprises.
You should allow at least 3% of the purchase price for closing costs although you may want to budget approximately 4% to be on the safe side.

 

Below is a list of typical closings costs that you might incur, but remember that they are estimates only and should be used as a guideline as of course they may vary depending on your own specific purchase.

Legal Fee and Disbursements
  • A lawyer will charge a fee for their professional services involved in drafting the title deed, preparing the mortgage, and conducting the various searches.
  • The disbursements, on the other hand, are out-of-pocket expenses incurred, such as registrations, searches, supplies, etc., plus G.S.T.
  • The actual fee that the lawyer will charge will depend entirely upon the deal between you and your lawyer. Be sure to ascertain exactly what this will amount to in a worst-case situation.
  • We recommend you call one or two lawyers and obtain a quote directly from them including both their fee and estimates of disbursements before choosing which one you’d like to use.
Land Transfer Tax

There is usually a land transfer tax that is charged on closing when the property is transferred to your name and it can vary depending on the price of the home, whether or not you are a first time home buyer and which city you live in Ontario, Canada.
Please see below to access the Ontario Land Transfer Tax Calculator for our area. A home in Toronto will also be subject to a municipal land transfer tax.

 

Mortgage Insurance
You should budget for insurance on your new home. Insurance costs can include default mortgage insurance, homeowners’ insurance, mortgage life insurance and title insurance.
Property Tax and Prepaid Utilities Adjustments
At the time of a sale, the lawyer for the buyer must confirm that local taxes have been paid up to date. If they are, a Tax Certificate is issued, from which any adjustments can be made – usually requiring the buyer to compensate the seller for any prepaid taxes.

 

  • If they are not up to date, the municipality requires that the seller pay them off from the proceeds of the sale. If they paid all their taxes by April, expect a large adjustment cost on closing!

Therefore, remember that if the previous owner has prepaid property taxes or other utilities for the year, they will be credited the prepaid portion on closing. Again, your lawyer will confirm all this for you. Also, remember utility providers may require a deposit for setting up a new account for your new home.

Property Appraisal
If your lender requires an appraisal report to be completed, it will have to be done before they hand over any mortgage money. They want to be assured that the property is worth what you are either paying for it, or valuing it for, and the cost normally range from a few hundred dollars to many hundreds depending upon the location and complexity of the property.

 

Home Inspection
A report commissioned by a property owner or purchaser, usually to verify the condition of a property prior to the “firming up” of a Real Estate transaction. The scope and detail may vary, but most reports indicate the specific problem and the cost to repair.

 

Interest Adjustement
If you arrange to make your mortgage payments monthly on the first day of the month, and your transaction closes after the first day of the month, your lender may charge you interest on closing up to the first theoretical payment date, called the Interest Adjustment Date. Your mortgage provider will calculate this for you. Remember, that all mortgages are paid in arrears so if your possession date is June 1st, and you choose to pay monthly, then your first payment will be July 1st. In this example there is no Interest Adjustment payable. However, if you moved in on May 29th, with your first payment on the first of the month, your first payment would still be July 1st, but there will be a three day Interest Adjustment (from May 29th to the “official start date” of June 1st).

 

Ontario Land Transfer Tax Calculator

 

As Your Realtor

I will provide the trusted, transparent, thorough and timely service that you would expect and deserve in dealing with your critical real estate assets.
Let me care for all your real estate needs. Let’s begin the conversation…
Please contact me at mike@mikewallace.ca or 905-632-2199 my RE/MAX Escarpment Office.