In addition to your deposit you will require the closing costs of the transaction. Generally these funds will be requested by your lawyer one week prior to closing. The lawyer may request his fees sooner than that.
Here is a summary of possible closing costs:.
Tax adjustment – if your mortgage company is paying your property tax along with your mortgage on a monthly basis they may require up to 6 months property tax prepaid in advance
Oil – If the home has oil heating you may be required to pay for the oil that is in the tank, unless it was otherwise included in the purchase price.
Land Transfer Tax – is calculated as a percentage of your purchase price. Below is the table for calculating land transfer tax in the province of Ontario.
Property value | Land transfer tax ( % of property value) |
up to $55,000 | 0.5% |
$55,000 to $250,000 | 1% |
$250,000 to$400,000 | 1.5% |
above $400,000 for land that contains at least one and not more than two single family residences. | 2% |
Mortgage Insurance – If you are obtaining a high ratio mortgage (above 75% of the purchase price ) lending institutions are required by law to insure these mortgages. Your mortgage insurance fees are calculated on a sliding scale and can be added onto the balance of the mortgage, so that you don’t have to put up this money up front. Here is the table of mortgage insurance fees
Loan Size (% of property value) |
Premium (% of loan) |
up to 80%
| 1.00%
|
up to 85% | 1.75% |
up to 90% | 2.0% |
up to 95% | 2.75% |
up to 95% (CMHC flex down product) | 2.90% * |
* This only applies to high ratio CMHC insured mortgages ( less than 25% down payment )
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