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First
Time Buyer Closing Costs
By: Robin Sukhu - Real
Estate Agent
Re/Max 2000 Realty Inc.
If
you are a first time buyer purchasing
a re-sale home for $300,000 in the City
of Toronto on February, 15, 2010, your
5% down payment, including the $5,000
deposit you paid when signing the agreement
of purchase and sale, will be $15,000
and you will be applying for a first mortgage
of $285,000 at 4%. Average yearly Property
taxes will be about $2,565 and your monthly
mortgage payment will be around $1,540.
It
is important for you to appreciate that,
when the closing date comes, you will
need to deliver to your lawyer more than
the $10,000 left of your down-payment
to close the purchase.
You
will need at least another $5,000 in addition
to the cost of home insurance.
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These
are your sample closing costs:
(For
condominium purchases, there are additional
costs) |
| Down-Payment
less deposit |
$10,000 |
P.S.T.
on the Mortgage Insurance Premium
Mortgage Insurance guarantees payment
of Mortgage losses to your Bank if
you default on the mortgage. Without
it, the Bank would not give you the
loan. The premium is $7,837.50 but
the Bank will add it to your loan.
You do not have to pay it on closing,
but you have to pay P.S.T. on the
premium.
|
$627 |
Mortgage
Interest Adjustment
If your Bank requires your payments
to start on the 1st of the month,
your first Monthly Mortgage payment
will be November 1, 2009 and you will
have to Prepay the interest on your
mortgage from September 20, 2009 to
October 1, 2009 so that each month’s
Payment covers interest for the preceding
month.
(Usually, this is avoided by starting
your payments on October 20, 2009).
|
$358 |
Mortgage
Application Fee incl. G.S.T.
(Usually, there are no Broker’s
or Lender’s Fees payable to
a Bank. Private lenders usually require
such fees.) |
$131 |
| Appraisal
Fee incl. G.S.T. |
$263 |
|
Prepaid
property taxes
Assuming that the Seller has paid
total 2009 taxes, you will have
to reimburse him/her for the period
from September 20, 2009 to December
31, 2009 (73 days) |
$513 |
Land
Transfer Tax
(If you were not a first time buyer
the total land transfer tax in Toronto
would be $5,700. Outside of Toronto,
the tax would be $2,975.)
|
$975
|
Title
Insurance
(If you require a survey, the cost
of a survey will be $700-$1100. Usually,
people who buy title insurance do
not buy a survey).
|
$250 |
| Registration
of Title Documents |
$141 |
Lawyer’s
Fees
(Lawyers’ fees and disbursement
vary from lawyer to lawyer and from
transaction to transaction)
|
$1,200 |
Lawyer’s
Disbursements
(municipal, utility and title searches,
couriers, fax, applicable long distance,
photocopies and Bank Charges)
|
$500 |
| BALANCE
REQUIRED BY LAWYER TO CLOSE |
$14,958 |
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