Now that you have saved your down payment, you are wondering what other expenses you will have to cover on closing day. These expenses are broken down into 2 types, added on top of the mortgage and fees that are due and payable on closing.
Typically the only expense that is added on top of the mortgage is the mortgage insurance premium. When you are purchasing a home and have less than 20% of the purchase price for the down payment the mortgage will have to be insured by a company such as CMHC or Genworth financial. Depending on the size of your down payment this fee typically ranges from 1% to 3.5% of the mortgage amount and is added on top of your mortgage balance.
As for the expenses that will have to be paid on closing, you will have to show your lender proof of having this money saved 2 weeks prior to closing. These expenses include but are not limited to:
- Lawyers / Legal Fee
- Searches and registration costs
- Title Insurance
- Provincial Land Transfer Tax
- P.S.T (Provincial Sale Tax) on the Mortgage Insurance Premium
Depending on your purchase price these expenses typically range in 1.5% - 2% of the purchase price. Also depending on the home you are purchasing, some of these fees can be rebated back to home buyer if he or she is a first time home buyer.
For more information on the home buying closing costs or contact us at 519-258-6888 to schedule your appointment.