Closing Costs when you are Buying a House in Ontario

Posted on: November 12, 2020

Buying a home is a big and crucial decision of life. Not only is the down payment you are required to pay to get a house, but also you will be needed to pay closing fees which can range from 1.5 % to 4% of the purchase price of the house. In this blog, we would like to discuss some closing costs , which you are required to pay when you are buying a house in Ontario:

Appraisal fee- If a lender requires an appraisal on property, in most cases, buyer has to pay the appraisal cost. Sometimes, Lenders find the accredited appraiser for you, and if that does not work for you then you can find by yourself. Lenders require appraisal to make sure, that they are not going to lend you more than the market value of the house. It might cost you $150 to $500. Accredited Appraiser Canadian Institute (AACI) and Canadian Residential Appraiser (CRA) are most trustworthy appraisers.

Home Inspection fee- Closing costs in mortgage also include home inspection fee. Buyers are required to pay this fee and it might cost them approximately $300-$500 depending on the size, location and age of the house. Home inspector properly explores the house, and make sure fixtures, chattels, ceilings,floor, plumbing, ventilation etc. are in good condition. He observes the exterior condition of the house as well.

PST on Mortgage Default Insurance- If you make less than 20% down payment to buy the house, you require Private mortgage insurance. It protects the lenders if buyer default in making payments. Ontario requires you to pay Provincial Sales Tax on this insurance, and it is 8% of the insurance. You must pay PST upfront in full.
We would like to explain buyer with an example, how it works. Lets say, your insurance premium is $8000 and PST is 8% in Ontario, then you require to pay, $8000*8%=$640. Based on this example, you would pay total $640 on your closing.

Home Insurance- The home closing costs also includes Fire inspection. This inspection is required to make sure you have a fire inspection certificate, and it might cost you between $250-$600. Lenders want to make sure that house is well insured if any damage occurs.

Legal Fees and disbursements- You are needed to pay legal fees and disbursements, these are the costs associated with mortgage closing and registering a property.

Title search & title insurance- Title search means there are no defects on the property means you are an officially registered owner of the property. Title insurance depicts you truly own the property, and it protects you also, if any lien, and encumbrances are discovered after closings. In other words, title insurance protects you from any fraudulent and forgery act. You can purchase title insurance through a lawyer, and it might cost you $250. Along with that, title insurance is a one-time payment that you pay upfront.

Land Transfer Tax- Land Transfer tax is also known as Property transfer tax. This tax is paid by the buyers to the province to use the land. Unlike property taxes, which are paid every year, land transfer tax is paid only once. Luckily, first time home buyer may be eligible for refund on land transfer tax known as First-Time home buyer’s rebate.
In metropolitan city like Toronto, Land transfer tax can be more expensive. Call Mortgage professional today, who can help you to guide, how much you need to pay taxes in your desired city.

Why choose us-
As a leading Mortgage Brokerage, we have strong relations with multiple banks and numerous lenders. We work with Canada’s leading lenders to provide you a mortgage solution that fits your budget. Our mortgage and financing process is amazingly simple, we represent you and match you with the best suited mortgage as per your needs. This way we can guide you through this complicated process with our years of mortgage financing experience.
• We are dedicated and professional Accredited Mortgage Brokers in GTA.
• We are well trained and have experience in the mortgage financing field more than 10 years.
• We can shop around with different lenders to get you the best possible mortgage rates and conditions as well.
• We have different options for different income and credit level with access to number of private lenders to suit borrower’s needs.

Contact us-
We are a professional mortgage broker in GTA. We can help you secure a mortgage with best mortgage interest rates. We are located at 2896 Slough Street, Unit # 6, and Mississauga, ON L4T 1G3. Call MB Mortgages Inc. today at 905-458-6929/416-939-7131 for your queries or you can email us at: info@mbmortgages.ca or you can visit our website at www.mbmortgages.ca

The information provided in this blog post is intended to provide general information. You should consult with a mortgage professional to fully determine the scope of your situation. MB Mortgages shall not be held liable from usage of the information provided on this page. Individual situation may vary.