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Final Cost of Buying a Home

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Final Cost of Buying a Home

Postby Arran McLellan on Sun Sep 16, 2012 7:02 pm

The purchase of your home is the biggest cost but not the only one.



1. Application/Mortgage Broker Fee - There can be a fee attached as the application costs lenders money as there can be credit and income issues to deal with.



2. Appraisal Fee - The appraisal amount of the home usually determines the amount of mortgage you will receive. This is sometimes done at the Buyers cost.



3. Land Survey Fee - If there is some issue with the boundaries or encroachments such as part of your neighbours house on your property, this is a cost that the Buyer will absorb.



4. Insurance - If you are applying for a high-ratio mortgage - borrowing more than 80% of the homes value - you will have to pay mortgage insurance as a protection to the lender if there is default on payments. You must obtain fire and extended coverage as the home is security against the mortgage.



5. Legal Fees - These are the conveyancing fees that a lawyer will charge to clear title, drawing up the title deed and registering the mortgage.



6. Property Transfer Tax - This is the tax that is paid on the transfer of a property from one party to another. It is calculated at 1% on 1st $200,000 and 2% on the balance. First time homebuyers are exempt if the price of the home is $425,000 and under.



7. HST - this applies to the sale of new homes. Resale homes are exempt from this tax. You can qualify for a new housing rebate on new construction up to $42,500 if the value of the home is $850,000 or less



Purchasing a home is one of the most rewarding and satisfying experiences you can have. Make sure to budget for cost such as utilities, taxes, maintenance etc...



If you have any questions on any of these points please feel free to email or call me at 250.884.3980
Arran McLellan - REALTOR®
Pemberton Holmes Cloverdale
o.250.384.8124
c.250.884.3980
http://www.NewImageHomeSales.com
"For world class service and results, call me today!"
"Not intended to solicit or interfere with existing listings or agency relationships"



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Re: Final Cost of Buying a Home

Postby syla on Mon Sep 17, 2012 3:25 pm

Thanks for the info. How much would each of those items cost?
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Re: Final Cost of Buying a Home

Postby Al Kennedy on Thu Sep 27, 2012 11:40 am

Hi guys, saw this post and thought I'd post a response to Syla's question. I'm not a Realtor so I can't speak to everything Arran mentioned, but here goes:

1. Mortgage/Application fee: This is uncommon at most mortgage brokerages to charge up front, I know I don't charge one. There can be some fees involved with applications and or mortgage fees, but they are quite rare and will be explained to you before you move forward. And they are usually due to a tough situation where conventional lenders cannot help you.

2. Appraisal Fee: this will usually run between $250-350 + tax, but it can vary according to the location and property type.

3. Land surveying: can really vary due to circumstances, but be prepared for a few hundred dollars minimum.

4. High Ratio Mortgage Insurance (CMHC/Genworth/CG): is a fee that is charged as a % of the mortgage size, and goes up as the down payment goes down. Usually there is no premium charged unless the down payment is less than 20%.

NOTE: This is not a fee that is charged up front, standard practice is to add it to the mortgage amount. And you only have to purchase it once for the life of your mortgage.

5. Legal fees: can also vary depending on which lawyer/notary you use, as well as what work is required from them. Expect to pay at least $700+ for a home purchase (less for a mortgage renewal or refinance).

6. Property Transfer Tax: Arran did a nice job of breaking that down and please note that it has to be paid in cash at closing - it can't be added into the mortgage unless you make a smaller down payment.

7. HST: Same thing, nice work Arran. Things can get a little choppy when building your own home vs. including HST in a developer's new home, but the amount is the same either way.

8 (bonus). Inspection: will run a few hundred dollars or more, but is worth it's weight in gold. If you buy a home without one then you're a better gambler than I am. It's true that an inspection is not perfect or a guarantee of any kind, but I've seen them save clients from making HUGE mistakes.

9 (bonus x 2). Title Insurance: this is an insurance policy for the benefit of the lender only, and it's bought at the solicitor at closing. Most lenders require this insurance policy but there are still a few who don't. Retails for $249 + tax, but I hear it can be had for less.
- Mortgage Consultant
Verico Select Mortgage
1925 Oak Bay Avenue, Victoria, BC V8R 1C8
Bus: 250.370.7601 ext. 225 | Toll Free: 1.888.370.7601 ext. 225 | Cell: 250.419.2339 | Fax: 250.370.7602
alan@alankennedy.ca
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Re: Final Cost of Buying a Home

Postby Arran McLellan on Thu Sep 27, 2012 4:59 pm

Thanks Al....
Arran McLellan - REALTOR®
Pemberton Holmes Cloverdale
o.250.384.8124
c.250.884.3980
http://www.NewImageHomeSales.com
"For world class service and results, call me today!"
"Not intended to solicit or interfere with existing listings or agency relationships"



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Arran McLellan
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Posts: 261
Joined: Thu May 12, 2011 8:20 am


 

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