Closing Costs Explained

When purchasing a home, you are faced with expenses known as closing costs. Some of these items are more
obvious than others, such as lawyer or notary fees or inspection costs. But are you familiar with other costs that
you will need to budget for?

Title Insurance – simply put, this is an insurance policy that protects the purchaser and their lender against losses related to the property’s title or ownership. Some examples are: existing liens against the property’s title; encroachment issues; or errors in surveys and public records.
Property Transfer Tax – all property purchases are subject to this tax. You can expect to pay 1% on the first $200,000 of your purchase price and 2% on the balance over that.
Lender fees – be sure to discuss these with your mortgage specialist, but these may include the costs of underwriting your mortgage, the appraisal (if required), and the costs to pull a credit report.
Inspection costs – this may be more than a home inspection, and may include such things as a septic inspection, water samples, or survey fees. Your Realtor can assist you with finding estimates or help you choose which inspections are best for you.
Notary/Lawyer fees – in order to transfer a property into your name, your legal agent will need to conduct a title search, draft documents (including mortgage documents) and file the title with the Land Title office under your name. If adjustments for taxes, utilities, tenant revenue or heating costs are involved, they will calculate these as well
and provide you with a statement of adjustments.  If you are the seller, you may also need to consider prepayment costs for your mortgage and the cost of the real estate commission.

A conversation with your Realtor – whether you are the buyer or the seller – can help clarify these items and ensure
you stay on budget.