There’s no better feeling than stepping foot into your new house and getting ready to start your new journey as a homeowner in Canada. It’s an exciting milestone, one that should be celebrated!
However, many often hold off on the celebrations after they find out about the various closing costs associated with their mortgage. For many, it is often a not-so-nice surprise to see the costs piling up following their down payment.
Yes - there are more costs to be considered beyond your down payment!
To stop any unwarranted surprises from popping up after your down payment has been made, we are going to dive into the various closing costs that come with your mortgage to ensure you are going into your home-buying journey as smoothly as possible.
Let’s dive in!
1. Land Transfer Tax
The Land Transfer Tax (LTT) is one of the most significant closing fees associated with any mortgage. When the property ownership passes from the seller to the buyer, you will obtain the fees associated with the LLT moving forward. The amounts vary by province, and you will be notified of the purchase price as you obtain ownership of your property.
2. Appraisal Fees
The Appraisal Fee is one that is optional, and depends on the lender. Some lenders require the buyer to cover these costs, while others pay the costs on the new buyer’s behalf. The Appraisal Fee, in essence, entails having a professional appraiser conduct the appraisal, which assists the lender in determining the value of the property. An appraisal may not always be required in obtaining a mortgage!
3. Mortgage Loan Insurance
The Mortgage Loan Insurance is another fee that depends on whether or not your down payment is less than 20% of your purchase price. Based on this, you may be obligated to pay this fee to ensure your lender is protected against potential borrower default.
4. Title Insurance
Title insurance protects you from potential legal claims on your property. Many lenders prefer to make Title Insurance a condition in the loan to ensure that they are protected against any possible defaults.
5. Legal Fees
Working with a lawyer during your homebuying process is essential to ensure that all legal requirements are met, and that the sale transfer can be complete. With this, comes legal fees such as title searches, document preparation, transfer of funds, etc. As well, registering your property with the local land registry is also an additional cost that needs to be made before the sale can close.
Understand The Additional Costs with Arise Mortgage
At Arise Mortgage, we will prepare you with explaining any additional fees associated with your mortgage before any surprises have the chance to pop up!
Get in touch with our team today, or check out our Instagram page to stay up to date with the latest mortgage tips and news!