Congratulations you just bought a house. But do you know what the closing costs are?
Here are seven closing costs you need to know about when buying a house or a condo in the city of Toronto.
1- Land Transfer Taxes
There are two land transfer taxes. One paid to the city and one paid to the province. If you are first time home buyer, you can get a rebate of up to $8475 between the city and the province.
2- Legal Fees
The second cost is your legal fees and that should be around the $1500 fee.
3- Title Insurance
This is a one time fee payable at closing and it's approximately $300 to $350.
4- Appraisal Fee
When the bank sends an appraiser to get a proper evaluation of the house or the condo, there is a cost of approximately $300 to $350 for that appraisal.
5- Home Inspection
Five is home inspection and that will run you anywhere from $350 to $500 depending on the size of the house or the condo.
6- Pre-Paid Taxes and Utilities
In some cases where let's say you’re buying in May or in June or some time throughout the year, that owner of the house or the condo has paid a portion of their property taxes and utilities and this is where your lawyer will do the adjustments at closing.
7- Provincial Sales Tax
For the buyers that are putting less than 20% down believe it or not there is PST on the CMHC insurance. Yes - there is Provincial Sales Tax and that cannot be added to the mortgage. That is a cheque that you're going to have to cut at the time of closing to your lawyer. Keep that in mind if you're a first time home buyer who's putting less than 20% or a buyer who's putting less than 20% into buying your house or condo.
There are other costs to take into account such as moving, any repairs or maintenance you are going to have to do to the house or condo. You might have to paint. You might have to buy some furniture. Keep in mind those costs once you move in to the new property.
In summary, if you are not a first time home buyer budgeting for 3 - 4% of your purchase price is financially prudent.