CLOSING COSTS

Closing Costs
Taxes & Fees | Other Last Minute Costs | Come and Search With Us | Other Things to Consider | Fixtures or Chattels

Its easy to count your available cash, but remember that all of these cash savings cannot be used as your down payment. There are last-minute costs such as taxes, legal fees, appraisal fees, moving expenses and house insurance to pay before you are finally in your new home.

The time to budget for those end expenses is NOW. You must be prepared to pay most, and perhaps all, of the following closing costs.

You may want to ask us which of the following may apply to you?

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Taxes & Fees
Property Purchase Tax
The British Columbia Provincial Government imposes a property purchase tax, which must be paid before any property can be legally transferred to a new owner. The tax is 1% on the first $200,000 of the property value and 2% on any value over $200,000. Ask us about the special regulations for first time buyers in B.C.

Goods & Services Tax
If you purchase a newly constructed home, you may be subject to a 5% GST on the purchase price. However, if the home is under $350,000, and this is your principal residence, a rebate will reduce the GST paid to approximatley 3.5% of the purchase price. If the price is over $350,000 the net GST to be paid increases gradually until it is a full 5% at amounts over $450,000.

Property Tax
If the current owners have already paid the full years property taxes to the municipality, you will have to reimburse them for your share of the years taxes. Property taxes are calculated from Jan Dec and are paid at the end of June.

Appraisal Fee
When the lending institution requires an appraisal of the property before approving your loan, it may be your responsibility to pay the appraisers fee.

Survey Fee
The lending institution may also require that a survey certificate be presented to them. The purpose of the survey is to formally establish the boundaries of the property and to ensure that all buildings are within those boundaries. If the current owner cannot provide a recent survey certificate, it will be your responsibility to pay the surveyors fee.

Mortgage Application Fee
Lending institutions may charge a mortgage application fee. This application fee may vary between lending institutions.

Mortgage Default Insurance
This type of insurance is required on all mortgage loans in excess of 75% of the appraised property value. Its purpose is to insure that the lender will not lose any money if you cannot make your mortgage payments and the value of your property is not sufficient to repay your mortgage debt. The insurance premium is paid to the lender and ranges from % to 3.75% of the loan value; however, in most cases this premium is added to the loan amount, and paid for over the term of the loan.

Life & Disability Mortgage Insurance
At your option, you may purchase insurance that will ensure that your outstanding mortgage balance is paid if you die or become disabled.

Fire & Liability Insurance
The mortgage lender will insist that you purchase an insurance policy which guarantees that, in the event of fire, the lender will receive the balance owing on the mortgage loan before you receive any insurance proceeds.

Legal Fees
The transfer of property ownership from the seller to the buyer must be recorded in the Land Title Office in order to protect the new owners interests. You will probably want to engage a lawyer or notary public to act on your behalf during the completion of your purchase. The legal fees for this service will include payment of a registration fee. If you are financing your purchase with a new mortgage loan, there will be a further fee to prepare and register the mortgage documents.

OTHER EXPENSES & FEES

Home inspection fees
Moving expenses
Deposits required by utility companies
Household goods: kitchen appliances, garden equipment, garbage cans, tools, window coverings, etc.
Redecorating or renovations
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