De-mystifying Closing Costs

Buying a home for the first time can be a bit bewildering with potentially more than a few unforeseen expenses. Rather than find yourself in this position when the time comes to make an offer, take a look at this primer on closing costs.

Legal fees – Your lawyer’s role in the transaction will be to review the offer, register the mortgage documents, complete the title search, register the deed with Land Titles and work with the Seller's lawyer on the statement of adjustments. Generally legal fees average about $1200.

 

 

 

 

 

 

 

 

 

 Property Tax and Utility Adjustment – You, the Buyer, are responsible for property taxes and utilities on the date of adjustment (generally the day of closing). Anything pre-paid by the Seller for beyond the date of adjustment is credited to the Seller in the Statement of Adjustments.

 

Land Transfer Tax – In Ontario, property sales (subject to some exceptions) are subject to LTT.  For illustration purposes the LTT on a $900,000.00 single-family home purchase in Mississauga would be $14,475.00. The same home in Toronto would be subject to Municipal Land Transfer Tax (MLTT) of $14,475.00 in addition to the LTT for a total of  $28,950.00.

Some of the other costs you may encounter are: Home Inspection, Property Survey, Title Insurance, Mortgage Insurance, Homeowners Insurance, HST/GST (depending on type of property), Interest Adjustments and moving expenses.

One piece of good news. Your realtor’s commission (2.5-3% of the purchase price) is paid by the Seller, not by you.