Additional Buying Costs

In addition to the purchase price of your home, you need to be aware of and budget for other costs associated with homeownership.

These potential costs include:

• Application Fee: Some lenders will charge you a fee to process your mortgage application. These fees vary between lenders, and some lenders will waive the fee entirely, so be sure to ask.

• Land Survey Fee: Some lenders may require a survey for the property you plan to purchase (the fee for which varies), or in lieu of a survey, will require title insurance. A survey confirms a properties boundaries and helps to identify if there are any encroachments.
• Home Inspection Fee: This inspection helps identify any potential issues with a property. When requiring a home inspection it is recommended to make any offer to purchase, conditional on the inspection and review of its results.
• Legal Fees: Your lawyer is an important part of your real estate team, and also forms part of the cost of buying a home. This includes disbursements, which are the costs associated with conducting a title search, drawing up the title deed, and preparing and registering the mortgage.
• Other Costs: These include property taxes, interest and utility adjustments to name a few. An adjustment takes place when the seller has already paid for something in advance and wants to be refunded for the unused portion on the date the home closes.
• Land Transfer Tax: Payable on the purchase of a home in the province of Ontario and City of Toronto. Eligible first time home buyers may receive a rebate on both taxes. For more details on Land Transfer Taxes click here.
• Resale Homes and GST: The purchase of resale or "used" residential homes are exempt from paying GST.
• Insurance: There are several types of insurance associated with the purchase of a home. They include:

• Mortgage Insurance: If your down payment is less than 20% of the purchase price, then you’ll have to purchase mortgage insurance. The cost of this insurance is based on a small percentage of the mortgage amount and is added to the mortgage principal. For more information on mortgage insurance click here.
• Mortgage Life Insurance: Usually offered by your lender and can be added to your monthly payments. This insurance pays off the balance owing on your mortgage if you or your co-borrower dies. If considering mortgage life insurance, also speak to your insurance agent about similar products they might offer.
• Property Insurance: Mortgage lenders require that you carry fire and extended coverage insurance that sufficiently covers the replacement value of your home. You may also want to investigate liability insurance as well. Speak to your insurance agent about the different types of coverage. If you have other policies, such as car insurance, you may be able to negotiate a package discount.
• Title Insurance: Covers among other things, defects in title such as errors and omissions in the public registry, errors in existing surveys and fraudulently discharged mortgages. Title insurance also offers protection if you can’t obtain an up to date survey or certificates from various authorities. The cost for title insurance is usually a few hundred dollars depending on the type of property.