CLOSING COSTS! In addition to your down payment, there are a few other costs to consider when purchasing a home:
DEPOSIT ON PURCHASE
Once your offer to purchase is accepted, you will be required to submit a deposit on your purchase. The amount can vary, and so you should discuss with your Realtor what is appropriate based on the value of the property. This deposit will form part of your down payment.
HOME INSPECTION FEE
Buying a home will, for most people, be the single largest investment of your life. As a buyer, you will want to ensure you are aware of any serious issues prior to finalizing the sale. You can expect an inspection to cost between $300-$500, depending on the size and location of the property.
APPRAISAL FEE
Your lender may require an appraisal of the property that you are purchasing. This appraisal will not only confirm the value of the property, but also confirm that its condition meets the expectations of the lender. Appraisal costs can vary greatly depending on location and size of the property; you should plan for a cost of $325-$550…keeping in mind that the more rural a property is, the higher the cost of an appraisal.
LEGAL FEES
In a purchase, you will need to enlist the services of a Solicitor. Your Solicitor will finalize the purchase of your property and prepare your final mortgage documents from the lender. You may obtain a quote from your Solicitor’s office prior to your appointment.
TITLE INSURANCE
Your lender may require title insurance in order to protect the title of your new property from fraud and possible deficiencies such as unregistered utility easements. The cost of title insurance in Alberta can vary; however, you can expect the cost to be between $250-$300.
PROPERTY TAX ADJUSTMENT
If the Seller of the property pre-paid the property taxes for the current year, then you will be required to pay back the tax amount for the time that you occupied the home. Ex: If you moved into your home on November 01 and the Seller paid the property tax until Dec 31, you would need to reimburse the seller for the 60 days that you occupied the property for that year.
INTEREST ADJUSTMENT
Most likely, your first mortgage payment will not be on the day that you gain possession of your new home. You will accrue interest from the date of possession until your first payment and will need to cover that cost.
**LAND TRANSFER TAX**
If you do not live in Alberta or Manitoba, you may have to pay a Land Transfer Tax. This handy calculator will show you how much you may owe depending on the province that you are buying in and the value of the property.
https://www.ratehub.ca/land-transfer-tax
The best way to approach home ownership is to be prepared! I strive to ensure that my clients are educated on the process and that the journey to home ownership is as seamless as possible.
Contact me if you are planning on making a move!