Becoming a homeowner is much more involved than just paying towards your Burlington mortgage every month. As a first-time homebuyer, you may be unaware of the additional costs associated with purchasing a home. So to help you get a better understanding, our team at Loewen Group Mortgages has created a list of the most common costs to expect when closing on your home.
- Down Payment: This cost is directly paid towards your home purchase price. It is recommended that you pay at least 20% of your down payment or else you will have to get mortgage default insurance.
- Mortgage Default Insurance: This cost is paid for by the borrower but it protects the lender in case of any default on the payments. This is required if you pay between 5% and 19.99% of your down payment because you are considered a higher risk.
- Title Insurance: This insurance is recommended to protect the new owner from any potential legal problems, such as unpaid charges from the original owner after the property has been purchased.
- Lawyer Fees: These costs are paid to your lawyer for any services they have provided you.
- Home Inspection: This service is not required but is highly recommended so you know exactly what is working properly, and what needs to be fixed in the home before you decide to purchase it.
- Property Appraisal: If you are in the market for a Burlington second mortgage and want to refinance your home, you most likely will be required to get the property appraised.
- Federal and Provincial Taxes: This is the GST or HST charged on a new home.
- Land Transfer Tax: When you purchase a piece of property, you are required to pay the land transfer tax. In Ontario, however, you are exempt from this tax if this is your first home purchase.
- Statement of Adjustment: If you purchase a home during the middle of a billing period, then you will have to pay half of the home’s bills such as utility, electric, etc., to the seller.
When purchasing a home, make sure you are financially prepared to pay all the additional costs expected at closing. If you have any questions about these costs or would like to get started on your Burlington mortgage application, please contact the James Loewen Group at 289-337-4029.