UpFront Ottawa

Don’t Forget About Closing Costs

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  • 4 years ago

Many people get caught up in all the excitement when purchasing a new home that they often give little thought to the closing costs. Don’t let these hidden amounts affect your finances. Make sure you are ready to cover any extra expenses by determining the associated closing costs before you agree to purchase. If you are not sure what is required, read on as we break down all the potential costs you will need to consider.

Appraisal Fee

Often the mortgage lender will require that the property is appraised to establish the value of the home. Usually they will require that you pay the cost, which is usually between $350 and $450.

Home Inspection

Your lender may require a home inspection of your home as part of their conditions. This is used to verify the condition of the property before firming up the sale.


In many cases the lender will require an up-to-date survey or certificate of location to be provided. You may have to pay for the survey if the seller does not have one. The average costs are between $1000 to $2000 and will need to be completed by an Ontario Land Surveyor. You may also choose to purchase Title Insurance that can replace the survey and in many cases cost less.

Legal Fees

You will also be required to pay legal fees to the lawyer and notary for checking title, and drafting up the legal documents in relation to the sale and closing.

Land Transfer Tax

Each province will require that you pay a tax that is a percentage of the assessed value of the home. Some municipalities may also include a land transfer tax that is payable on top of the provincial amount.

Title Insurance

Title insurance is an insurance policy that protects owners and their lenders against losses that are related to the property’s title. This is not required in Ontario but should be discussed with your lender and lawyer if you should obtain the insurance.

Prepaid Property Taxes

If the vendor had pre-paid for the property taxes you’ll need to reimburse them for any amounts covered after the closing date.

Prepaid Utility Bills

There may also be pre-paid utility bills and tank filling costs that will need to be reimbursed to the vendor.

PST on Mortgage Loan Insurance

Down payments under 20% require mortgage loan insurance. Your lender will add the premium to your mortgage amount or you can pay the lump sum upon closing.

Interest Adjustment

If your mortgage payments start on the first day of the month and the transaction closes after the first day your lender can charge you interest up to the first payment date.

Water Quality Inspection

For homes with a well, you may wish to have the water quality tested to ensure it’s safe. This cost may come out of your pocket if you cannot negotiate the cost with the seller.

Don’t forget about closing costs. Know what is involved in the entire home buying process before committing to anything.

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