March 23, 2011
Are closing fees added to my mortgage?
Question of the Week: Are closing fees added to my mortgage?
It’s really important to consider the additional cash expenses when closing your house. The biggest is land transfer tax. For a $300,000 home in Toronto, the land transfer tax could be as high as $5,700. TREB has a calculator which will help you to estimate it. The calculator does not show the refund to first-time home buyers which will cover your total land transfer tax up to a maximum of $2,000 for Ontario and $3,275 for Toronto.
The other sizeable cost to consider is lawyer fees likely in the range of $750 – $1,500. Some other costs you may want to consider include home inspection, appraisal fee and property insurance. Keep in mind that these cash costs are in addition to your down payment which must be a minimum of 5% of your home value.
If your down payment is between 5% – 19.99% you will also incur CMHC insurance. This is not a cash outlay, as it is rolled into your total mortgage amount. When you are ready to start shopping for a mortgage, it’s a good idea compare mortgage rates.