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COMMON CLOSING COSTS

A major part of any mortgage transaction includes Closing Costs or expenses. In the event of a Purchase, the standard applied by mortgage lenders is 1.5% of the purchase price. 

High Ratio Mortgage Insurance Premium - This is a mandatory insurance in most cases when the down payment is less than 20%. This amount is most likely included in the total mortgage approved.

PST or provincial sales tax - this is applied on the purchase of a new home. In some cases, this amount is included in the total purchase price

Property Transfer Tax - in British Columbia this is a tax levied on the purchase of a home.

Appraisal Fee -  Your lender will have required an independent appraiser to determine the value of the property and whether it meets its lending criteria. This may or may not be required depending on whether the mortgage application is insured or the subject property is accepted by the lenders’ auto valuation system.

Bridge Financing -  If your home purchase closes before the sale of your current home, you'll need to finance the cost of the home purchase for a short period of time. 

Interest Adjustment Payment - Most lenders expect the first mortgage payment one month after closing the purchase. If you close mid-month, however, some lenders expect the first payment, or at least the interest accrued during that time period, at the beginning of the next month, two weeks before you would normally expect. 

 

Notary or solicitor legal fee - this is the time and staff cost to have a Notary Public or solicitor review and finalize your new mortgage.

Disbursements and Adjustments - these are additional expenses incurred and may include Title Insurance, assignment of rents, courier, land title registration, lender, and brokerage fee.

Title Insurance - Title insurance is an insurance policy that protects you, the homeowner, against challenges to the ownership of your home or from problems related to the title to your home. 

Property Tax/Utility Bill Adjustments - This is an adjustment for any home expenses that the seller may have prepaid in advance.