January 25, 2018 | Buyers

Common Closing Cost to Expect When Buying a Home

Common Closing Costs When Buying a Home

 

When buying a home the last thing you want is to be surprised on the closing day with a bunch of unexpected costs. We are here to help prepare our buyers for closing.

On the closing day you will have to pay provincial land transfer tax this is calculated as a percentage of the purchase price. It usually ends up being 1-1.5% of the purchase price. In Guelph, we do not have an additional municipal land transfer tax but some cities, Toronto for example do. If you are a first time home buyer in Ontario you will get up to $4,000 off of your land transfer tax, which could be enough to cover the whole amount!

Example: First time home buyer purchasing a $400,000. With the $4,000 rebate, they will only have to pay $475.

Click here to calculate your land transfer tax! 

Other expenses include legal fees, disbursements and title insurance which all add up to approximately $1400 on closing when you are purchasing a new home.

Another of the most common closing costs when buying a home is mortgage insurance. If you are putting less than a 20% down payment on your home then you will be required to get mortgage default insurance. Although your mortgage insurance is financed through your mortgage you will be required to pay tax on the insurance on closing.

You should be prepared to pay around 1.5-2% of your purchase price in closing costs in addition to your down payment and moving costs. If you have any questions about closing costs when buying a home please comment below or contact us here!

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