Buying a home will likely be the biggest purchase you make in your lifetime. There’s a lot involved when it comes to finding the right house, making sure it is up to the right standard, then negotiating and closing the deal with the sellers.
However, even after you’ve agreed on a price and shaken hands there are still additional costs that can be significant if they aren’t correctly managed. Read on for more information on closing costs that a buyer can expect to deal with.
Land Transfer Tax
Transferring ownership of a property into your name requires a certain charge. This fee is based on a percentage that varies from region to region, so you will want to check an online calculator to find out what the rate is in your area. Note that first time home buyers will have the opportunity to get some of this fee back due to rebates.
Mortgage Costs
Setting up your new mortgage will require some money as well. Your bank may charge a fee for your mortgage appraisal, and you may also need to purchase mortgage insurance depending on the percentage of the purchase price that you put down in the initial payment.
Adjustment Costs
Adjustment costs refer to taking over payment for regular maintenance services such as hydro, gas or water. If these have been prepaid by the previous homeowner, they will need to be reimbursed this amount once you take over ownership of the house.
Home Insurance
You will be required to purchase home insurance that protects against fire, theft and other disasters before you can finalize your mortgage. Prices and levels of coverage vary from company to company. You may also be able to arrange discounts, which can add up to significant savings in the long run.
Title Insurance
It is also possible to purchase title insurance which protects you gain mortgage fraud, identity theft and forgery. While this is not required, it can give you additional peace of mind in case a cyber criminal or forger makes an effort to pull a fast one.
Legal Costs
Last of all, you will need to plan for any fees incurred by your legal representative while closing the deal for your new home. Taking the time to research the real estate lawyers in your area to find an experienced and expert representative can help you save money and time.
Make sure you consult with your lawyer in advance so that you have a full understanding of all the fees and so that you can enjoy your new house without worrying about a new and unexpected payment!