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Saturday, September 30th, 2023

Closing Costs on your Vancouver Real Estate Financing

Closing Costs on your Vancouver Real Estate Financing

real-estate-investment-property-closing-costsBuying a home and setting up the real estate financing is expensive and time consuming. However, many people who are first time home buyers may not be fully aware or properly budgeting for the closing costs which can leave you scrambling if you’re not aware of them.

There are a variety of closing costs you should be aware about when buying a home. In this article we will provide a breakdown of some of the closing costs you are most likely to encounter when buying a home. Some costs or a portion of a non- reoccurring cost may or may not be covered by the seller.

Most experts suggest you expect that your closing costs will run roughly from 1% to as much as 2 1/2% of the purchase price of the home.

Here is breakdown of what you should be prepared to encounter and possibly be responsible to pay.

Appraisal Fee – Although this will normally be paid for by the bank, they will pass it onto you.

Mortgage Application and Processing Fee – This may also include the appraisal fee but is what the lender will charge for taking the mortgage application and processing it.

Credit Report – The lender will perform a credit check on your finances when you apply for a mortgage.

Mortgage Insurance and PST/HST – This will be required if your down payment is less than 20% and will be added onto your mortgage balance.

Legal Fees and Disbursements – You will have to hire the services of a real estate lawyer or notary to act on our behalf for the purchase of the property.

Interest Adjustment – If you arrange your mortgage loan before the end of the month, the lender may require you pay the interest for the balance of that month.

Insurance for your Property Title – This is insurance that protects you against a challenge against your property ownership title, and may be an optional but not necessarily a required expense.

Land Registry Tax – This is a one time tax charged by the province when property is transferred.

Levies – Usually only applies to new subdivisions and charged by the municipality.

Property Survey – This is required by the lender before a mortgage is approved. Make sure it reflects any improvements and is up to date.

Home Inspection – This may run from between anywhere from around $300 -$450

New Home Warranty – This only applies to newly constructed homes to ensure that the home is built according to proscribed standards.

Insurance – You will have to ensure you have fire insurance in place for the home before you take possession. You will also need regular home insurance and should have your possessions insured. You will also be expected to have mortgage life insurance or some of other form of life insurance to cover the amount of the mortgage.

Bottom Line

These are some of the potential closing cost which you may encounter when you complete your real estate financing. If you are not certain what may be applicable to your particular circumstance then you best be advised to consult with your real estate lawyer, agent or your broker to get more information on what you need to have