Don't Forget Closing Costs While Buying a Home

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Category: Real Estate

Published on Monday, 09 June 2014 11:21

Written by MiPalace

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Apart from the down payment of your dream home, you must also remember the "closing costs" when you have a wide array of inexpensive homes inspite of the fact that the mortgage rates are quite attractive, these days. You're likely to see different charges mounting up in front of you and on most occassions these payments will seem to be legally mandatory for you while buying a property. Payments like these include:

Legal fees: Your home-buying team often relies on the notary public or an attorney. Legal fees are charged for the work that these professionals provide. In general, legal fees involve handling some disbursements, arranging property surveys as well as searching property titles.

Mortgage insurance and fee for application: Mortgage insurance is necessary for houses that have mortgage to cover their purchase price worth 75% or more. This is what happens in case of high ratio mortgages. 

Property insurance: Your home and the contents within it have a replacement value. Such replacement value is covered by this insurance. A majority of mortgage lenders will need proof that you possess this coverage prior to processing a mortgage.

Home inspection:  Information may be collected via detailed home inspection. This information may be updated or downsized by any professional home inspector. He is the right person to validate or update necessary information.

Property transfer tax: This is a provincial tax which is calculated upon the initial $200,000 of the fair market value as well as on the balance. It is payable @ 1% of the initial fair market value worth $200,000 as well as on the balance worth 2 percent. The value that a property fetches on an open market is termed as the "Fair market value". The fair market value finds another good indication on the actual buying price. Apart from the initial home buyers, there are also some other exemptions.

GST: To some extent GST needs to be paid upon the buying price of all new homes, even when you may avail partial rebates on the buying price of most homes.Resale homes meant for residential purposes are mostly GST exempted. 

Additional charges: You may need to bear the costs of certain things like the heating oil or other associated costs met by the seller. These costs are supposed to be associated with the property prior to the closing day.

Hook-ups: There are a number of hook-up expenses associated with appliances like hydro-systems, TV cable, telephone and similar utilities. These charges are also applicable on identical services.

Moving costs: There's a cost involved in moving out of your old home and entering the new one. This basic cost has to be remembered by you, specifically when you've hired a professional moving company. The closing costs can be explained by a Realtor in a better way - make sure you count them into your financial plan while you're saving to purchase a home.

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