Closing Costs...

Here is an answer to another one of your questions:

I have my down payment saved and I am ready to buy a house...is there any other costs I need to be aware of?

The answer is "Yes."

I like to advise my clients to hold back about 1.5% of the price of the house for closing costs.  Closing costs are handled through your  lawyer's office.   

One of the big ticket items here is the Land Transfer Tax.  This tax is payable to the land titles office at the time the title is registered.  It is a percentage of the purchase price and different percentages are applied to each part of the price.

No tax on the first $30,000

0.5% of the amount from $30,001 to $90,000

1.0% of the amount from $90,001 to %150,000

1.5% of the amount from $150,001 to $200,000

2.0% of the amount in excess of $200,000.

As a general rule (and a little less intimidating way to determine what you would owe) a $200,000 house would cost $1650.00 and you would simply add $20.00 per additional $100,000 of the price of the home.  For example, a home purchased at $300,000 would cost $3650.00 (1650.00 + 2000.00) in land transfer tax.  There is also a $69.00 registration fee.  

If the home you purchased is less than $200,000 the tax owed would be less.  For example, a home purchased at $150,000 would cost $900.00 in land transfer tax plus the $69.00 registration fee.

Some other costs to consider at closing would be your legal fees.  If you are both selling and buying these fees would be larger.  Many lawyers charge approximately $300.00 for a basic transaction but it is recommended to speak to your lawyer directly about this.  

Sometimes the seller will have and supply a current survey certificate and zoning memorandum which, in this case, there will be no additional cost to you but if you require a new survey certificate and zoning memorandum, these will cost approximately $500.00.   An alternative to this would be the purchase of title insurance which would run you approximately $250.00 (this is a one time payment, good until transfer of title).  Again, your lawyer will discuss this further and make his recommendation to you.

Additional costs would include Tax Certification, Title Searches,  and Couriers at approximately $35.00 plus GST each.  There will also be some miscellaneous costs incurred on behalf of the client including photocopying, postage, fax charges, file materials etc which could add up to approximately $40.00 plus GST.  There may also be adjustments that have to be reimbursed to the seller in regards to property taxes and other costs that were pre-paid by the seller.

It's difficult to give you an exact number for what you will need when it is time to close your home purchase but preparing for these costs in advance is crucial. Your lawyer will typically pay your closing costs on your behalf and you will be billed from your lawyer's office accordingly.

I'm here for YOU.

~Ciao