Sealing the Deal
Before you sign on the dotted line…here’s the fine print on the trust cost of closing.
There are some up-front costs associated with purchasing a home.  These possible extra costs are either one time costs or ongoing monthly expenses.  Not all of these costs may apply to you.  This should assist you in the estimation of your total financial obligations.

Home inspection

Inspectors in Ontario are unregulated so fees may vary.  They can range from $150 to $350 + applicable taxes.  Larger homes may cost more and an inspection carried out by an engineer who provides a written report will cost close to the upper limit.

Home owners insurance

You may be carrying over your property insurance from your previous property or starting from scratch.  Either way it is important to contact your broker or insurance company to get accurate quotes for insuring your new home and its contents. 

Utility hook-up fees

This typically includes phone, cable, gas and hydro.  Usually these fees will be included in your first bill after moving in.  Make note that there is a possibility that suppliers will demand a deposit if you do not have a previous account or payment history on file.

Land transfer tax (L.T.T.)

This applies in most provinces, including Ontario.  It varies as a percentage of the property’s purchase price which is usually between 1%-4% which must be paid by the purchasers.

Formula:
.005 x the first $55,000
.01 x (from $55,000 to $250,000)
.15 x remainder of purchase

Legal Fees

A lawyer will be required to tend to the closing details.  Lawyers’ fees range depending on the complexity of the deal and are to be paid just before the closing day.
Can include:
-           Title search
-          Disbursements
-          Zoning certificates
-          Land registry
 
H.S.T.

Usually included in offer and purchase price.

Property survey

The survey can be asked for in the offer, but if the vendor does not have it, it is the purchaser’s responsibility to verify a property survey exists.

Appraisal fee / mortgage insurance application fee

If your loan is not insured (high ratio mortgage insurance or a 5% to 15% down payment) your lender may require a property appraisal for mortgage purposes.  A basic appraisal is $150 - $250.

Mortgage Arranging Fee

This is only charged in unusual circumstances.

Lender’s administration fee

High risk mortgages may charge for foreign (outside of Canada) credit history.

Adjustments

Expenses that adjust the purchase price up or down on closing: i.e. mortgage interest, fuel, property taxes, etc.

Property tax account holdbacks

Your lender will likely have one of the following policies about payment of your property taxes:
a) You pay your own taxes as they come due.  This means no additional closing expense to you.
b) The lender pays your taxes and collects a monthly amount from you.