On this episode of Frequently Asked Questions, the question is “What closing costs would I be expected to pay?”

If you are thinking about purchasing a property, it is best to speak with your bank or mortgage broker and get pre-approved so you know exactly which properties to look at and what your down payment would be.

At the time you have an accepted Offer, you will be expected to pay a deposit. You will then need to speak to your lawyer to get an idea on the costs involved to facilitate your purchase. Your Lawyer will charge a Fee plus HST for services provided to handle your purchase. There are disbursements you will be required to pay, some of these may include, title search costs, title insurance, registering your Deed and/or your Mortgage, Land Transfer Tax, just to name a few. If you are a first time home owner and are eligible, you may receive a rebate of a maximum of $4,000.00 toward payment of your Land Transfer Tax. For example, if you purchase a home in Ontario for $400,000.00 (not including Toronto area), the total Land Transfer Tax payable would be $4,475.00 however, if you are a first time home owner and eligible to receive a Land Transfer Tax Rebate, you would only pay $475.00.

Other costs to consider would be property taxes. If you were for example closing on a property on September 1st and the home owner paid his property taxes to the end of the year, the home owner would receive a credit on closing for the balance of taxes he paid where he was not an owner. Your lawyer will go over a Statement of Adjustments with you which will show you this tax adjustment and as well a credit to you for the deposit you made at the time your Offer was accepted. Lease payments and Propane tanks being filled are other examples of adjustments that will be made on closing. Your lawyer will let you know closer to closing how much money you will need to bring into their office which is usually in the form of a bank draft or certified cheque. This amount generally includes your down payment and closing costs.

Definitely keep these costs in mind when looking to purchase a property. They may add up quickly!

Thank you for listening to our Frequently Asked Questions series.

If you have a question you would like featured in this series, please email your question to info@saugeenteam.com and we will answer in the coming weeks!

See you next time!

Written by and featuring Terina Wnuk, Sales Representative

All information provided is to the best of our knowledge and does not constitute legal, building, or environmental advice.