OAKVILLE NEIGHBOURHOODS AND HOME PRICES
OAKVILLE NEIGHBOURHOODS AND HOME PRICES
Explaining Buyer Closing Costs
Closing Costs are Upfront Expenses you need to pay for with 'cash' before or on the closing day.
Typically you use the equivalent of from 2% to 3% of your planned purchase price to pay for these 'cash' expenses. Here are the most common Closing Cost items:
Home Inspection Fee: A home inspection is a report on the condition of the home and generally costs between $350 and $500, depending on the size of the home and whether there are known issues that require follow-up.
Legal Fees and Disbursements: Your lawyer's fee for verifying all documents, checking the legal status of your new home and transferring it to your name must be paid at the time you sign your new ownership documents. Be cautious and allocate at least $1,000 of your savings for this expense.
Prepaid Property Tax and Utilities: You may have to reimburse the seller for prepaid tax and utility bills that apply to part of the period after you have taken over ownership. These prepaid expenses are calculated by your lawyer and added to that bill.
Provincial Land Transfer Tax: Ontario charges every home Buyer a Provincial Land Transfer Tax (PLTT). It is a formula based on the purchase price. This is the biggest 'hit'. Use this calculator to get the approximate amount.
Property Insurance: You will need to arrange for this well ahead as it takes time to shop around for the best rates. The mortgage lender requires this because the home is security for the mortgage. This insurance covers the cost of replacing your home and its contents. Property insurance must be in place on closing day. For a condo, you only need contents insurance as the condo fee includes building insurance.
Title Insurance: Your lawyer will routinely recommend you purchase title insurance – which protects you from losses due to a lack of a full and up-to-date survey, title defects and identity theft/fraud. This costs about $300-$450.
There are other less typical Closing Cost items which you are unlikely to run into including: (1) an Appraisal Fee ($250 -$350)- [sometimes required by lenders for for unusual properties or home styles], (2) a new Survey fee ($2000+) again usually for very oddball lots or (3) charges for Well Water and Septic Tank tests for rural properties.
Here's a useful Home Purchase Cost Estimate worksheet where you can plug in estimated amounts for these various closing costs.
Typically you use the equivalent of from 2% to 3% of your planned purchase price to pay for these 'cash' expenses. Here are the most common Closing Cost items:
Home Inspection Fee: A home inspection is a report on the condition of the home and generally costs between $350 and $500, depending on the size of the home and whether there are known issues that require follow-up.
Legal Fees and Disbursements: Your lawyer's fee for verifying all documents, checking the legal status of your new home and transferring it to your name must be paid at the time you sign your new ownership documents. Be cautious and allocate at least $1,000 of your savings for this expense.
Prepaid Property Tax and Utilities: You may have to reimburse the seller for prepaid tax and utility bills that apply to part of the period after you have taken over ownership. These prepaid expenses are calculated by your lawyer and added to that bill.
Provincial Land Transfer Tax: Ontario charges every home Buyer a Provincial Land Transfer Tax (PLTT). It is a formula based on the purchase price. This is the biggest 'hit'. Use this calculator to get the approximate amount.
Property Insurance: You will need to arrange for this well ahead as it takes time to shop around for the best rates. The mortgage lender requires this because the home is security for the mortgage. This insurance covers the cost of replacing your home and its contents. Property insurance must be in place on closing day. For a condo, you only need contents insurance as the condo fee includes building insurance.
Title Insurance: Your lawyer will routinely recommend you purchase title insurance – which protects you from losses due to a lack of a full and up-to-date survey, title defects and identity theft/fraud. This costs about $300-$450.
There are other less typical Closing Cost items which you are unlikely to run into including: (1) an Appraisal Fee ($250 -$350)- [sometimes required by lenders for for unusual properties or home styles], (2) a new Survey fee ($2000+) again usually for very oddball lots or (3) charges for Well Water and Septic Tank tests for rural properties.
Here's a useful Home Purchase Cost Estimate worksheet where you can plug in estimated amounts for these various closing costs.
