List of charges, which lawyer hand overs on the closing date of your home is known as closing costs. Extra costs above the price of the home may wonder some of you. As per CMHC and Genworth Financial one should have at least 1.5% of the purchase price for closing costs in addition to the down payment (have around 2.5% to be on the safe side).  The costs vary among provinces and cities. Following is the brief explanation for of these costs. Below are some of the closing costs you may encounter depending on your specific situation. This will help you to discuss with your lawyer who can provide a more realistic estimate for your situation.

Appraisal Fee Generally Required with New Homes An appraisal offers a professional view of the market value of the property to lender.  Generally this cost is the responsibility of home owner. Cost may vary from $100 to $300. Home Inspection Fee Generally Required with Resale Homes A complete professional inspection of home is done to benefit buyer. This home inspection can cost around $300 - $400 and is worth the investment. While appointing a home inspector make sure that inspector has liability insurance just in case they overlook something.

Fire Insurance

From the time you take possession of the home, mortgage lender, require a certificate of fire insurance to be in place. Required amount is usually the amount of mortgage or the replacement cost of the home. This cost may vary with respect to property size, amount of coverage, the insurance company and the municipality. The cost can may differ from $250-$600 yearly for most properties.

Provincial Sales Tax on Mortgage Insurance

If your mortgage is insured, (CMHC or Genworth Financial), you ought to pay the appropriate taxes on the insurance premium on closing.  Whereas the insurance premium can be added to the mortgage amount, the tax must be paid at closing.

Land Survey Fee or Title Insurance Fee

Lenders usually require the current survey of the property. If it is not available then the cost ranges from $600 - $900 for a new one. Instead of survey most lenders prefer title insurance which is comparatively reasonable.

Legal Costs and Disbursements

Lawyers and notaries charge fees for their services included in drafting the title deed, preparing the mortgage, and leading the various searches. Disbursements are out-of-pocket expenditures incurred during the methods like registrations, searches, and supplies.
 

Land Transfer Tax Most provinces charge a land transfer tax payable by the purchaser. This amount differs from province to province. Land transfer tax is based on the purchase price. Buyer who are purchasing new home for the first time may be permitted to a refund. New Home Warranty New home warranty programs covers new homes in most of the provinces.  The cost to the purchaser for this assurance is approximately $600 and should the builder default or fail to build to an agreed-upon standard the fund will end or repair the deficiencies to a maximum amount.  For additional information on Ontario new home warranty please visit http://www.tarion.com.

HST

Only on purchase of newly constructed homes HST is billed. While purchasing a new brand home make sure that who will pay this amount, you or the builder.  On the offer the purchase price will say "Plus HST" or "HST Included" and who gets any HST rebates.  Several builders have enclosed this value into the purchase price so the buyer does not have to come up with it at closing.

Closing Adjustments

Make an estimate for the bills the vendor has prepaid like property taxes, utility bills, and other charges. Any bills after the closing date are the responsibility of the purchaser.  Once the various searches have been completed, attorney will let you know about it.

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