Closing fees when buying a condo in Ontario
Sometimes, people gets into trouble if purchases a condo or other property without doing their homework. As the sale goes through, they’re surprised to find that closing costs are higher than expected due to fees that they didn’t budget for, especially in Toronto. It’s unfortunate that high closing costs come as a surprise to some people. You must always consider additional fees that can raise your closing costs when budgeting for your purchase.
Buying real estate can be a challenging, and it’s one of the most expensive purchases a person will ever make in his or her life. It is advisable for any investor or buyer to some proper research before they buy any property for the investment. Hire professional realtor who can guide you through process and all possible cost involved in the transaction.
Here are some factors you should dig into before making your decision of buying any property or pre-construction property.
(1)Deposit:
Same as you pay down payment on your house purchase, You’ll need to pay a certain percentage of the price of the condo on signing, and throughout the building process.
(2)Land Transfer Tax:
This is a significant amount that will add to your closing costs. Depending upon the purchase price and area the property is located, Land transfer Tax is calculated. You will see online calculator for Land Transfer Tax or click here.
(3)Tarion Warranty Fee:
On new-build condos, there is an Tarion enrollment fee. The fee depends on the purchase price of your condo. Ask details about Tarion warranty to your agent and see how you get protected in case of problem arise in condo.
(4)CMHC Insurance Premium:
Usually, this premium you don’t have to pay at the time of closing but it will be added to your mortgage amount. If you plan on putting less than 20% down on your condo, then insurance premiums on your mortgage are another fee you need to account for. The Canadian Mortgage and Housing Corporation (CMHC) usually requires the lender to pay insurance on any mortgage with less than 20% down, and these premiums are passed on to the property buyer. Usually it is between 0.5% to 2.5% depends on how much down you put. Use CMHC calculator to find out how much is the premium.
(5)Legal Fees:
This is the standard cost involved with every transaction. You need to take legal help of lawyer for preparing property ownership documents and deed. Usually it varies between $1000 to $2500 depends upon the lawyer you work with.
(6)Other Costs:
There are some other possible costs which builder may pass on to buyer. You should count those costs as a closing costs. Some examples of costs are below:
· Home inspection
· Property appraisal
· HST, where applicable (You should advise from accountant for claimable HST)
· Title insurance, and Utility service deposits
· Builder and Educational levies (Sometimes builder Cap the Levies)
Looking to buy condo? Please connect with me, I will guide you properly and make sure your transaction smooth.