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Mortgage Closing Costs

Understanding expenses associated with purchasing a home

Many homebuyers are unaware of the various closing costs they will need to pay in order to finalize their mortgage financing. It pays for homebuyers to know the specifics of closing costs so they can better prepare for unexpected expenses at such an important time in their lives. The exact closing costs will depend on where you live, how much you are borrowing, how your mortgage is financed, your closing date and mortgage amortization.

Below is a list of the majority of expenses associated with purchasing a home and obtaining mortgage financing. We recommend each of these items be considered and accounted for when preparing your home purchase budget. As every client is unique, so is every mortgage. Costs may vary depending on the mortgage application and not all of the items listed below would be required:

Property Purchase Tax : A property purchase tax of 1% on the first $200,000 and 2% on the balance will be applicable. If you are a first time home buyer, you are exempt from this tax up to $375,000.00

Lawyers Fees:These vary across the nation and range from $700 to $1200. The Dreyer Group can refer your clients to a lawyer who offers a competitive legal package.

 Mortgage Appraisal Fees: Lenders require a written analysis of the estimated value of a property, as prepared by a qualified appraiser. A fee is typically charged for a real estate appraisal because a home appraisal is time-consuming. Appraisal fees fall around $275.

Land Survey: Is a legal written and/or mapped description of the location and dimensions of their land, obtained from an accredited land surveyor $500.

Title Insurance: May be purchased in lieu of a land survey in some cases. Title Insurance provides protection against several defects such as problems with the property that would have been revealed by an up-to-date land survey.

Land Transfer Tax: : Buyers must pay this tax to their provincial government when the property's title passes from the seller.

Mortgage Insurance:  If you are buying a home for less than 25% down you will need to pay a premium of up between 1% and 3.5% depending on the mortgage amount and amortization of the mortgage.

Home Inspection Fee: A very important part of purchasing a home, the home inspection is an objective visual examination of the physical structure and systems of a house and costs between $350-$400.

Getting the Right Advice: The rules and regulations surrounding various mortgage fees are complex. A knowledgeable professional will guide you through the intricacies of these closing fees as they apply to your individual situation.

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