Closing Costs: Are You Ready To Pay?

When buying a home there are a lot of hidden expenses that can take you by surprise. Knowing about these costs can make the process of buying your home much smoother. These costs can come out of [what seems like] nowhere. The hidden price tags lay hidden within insurance, mortgage approval, moving fees and more. Here are the most popular hidden costs when buying a new home.

Home Specific costs:

  1. Land Transfer Tax – To transfer the land your home is sitting on into your name can cost between 0.5% to 2% of the home value. First time home buyers are eligible to qualify for rebates.
  2. Newly Constructed Homes – If you had your house built from the ground up additional costs can emerge if you want to add any upgrades, landscaping or change materials (ex. flooring). The new built is also subject to 5% GST or 13% HST, but this is normally included in the cost of the house.
  3. Home Inspections – In order to be made aware of any issues with the structure or systems (ex. Pluming or electrical) of your new home, it will need the appropriate inspections. Most of these inspections cost between $350 to $450.

Finalizing Your Mortgage:

  1. Appraisal Fee – Normally an appraiser is supplied by the lender, but they will evaluate and confirm the market value for the home. This normally costs $400 out of pocket for you.
  2. Legal Fees – When settling a mortgage, you will need a notary or lawyer to help protect you and your interests. Fees normally start around $500 to $800, plus disbursements and added services.


  1. Home/Fire Insurance – Cost depends on the amount of coverage that is needed, but it will cost at lease $500/year.
  2. Tax on Mortgage Insurance – If you have a down payment of less than 20% then you must have default mortgage insurance. The insurance can be included with your mortgage payments, but PST is due at closing. For example, if the insurance costs $5000, and PST is 8% then you owe $400 up front at closing.
  3. Title Insurance – This insurance safeguards you against problems with proof of ownership and also fraud. Fees are normally around $150 to $350.

Overlooked Costs:

  1. Prepaid Costs – If the seller of your home has paid any bills that extend past the closing date you will need to reimburse them those expenses. This can include property tax, electric and hydro bills. This can add hundreds of dollars to the upfront costs as they will need to be paid back within a few months.
  2. Moving In – Moving trucks, Movers, Changing locks and more. The small things no one thinks about until the last minute.  Renting a moving truck can cost $100 or more. Movers are normally a few hundred dollars. It can cost $50 to $60 to change all the locks on the property. Any additional costs will come from buying moving boxes, cleaning supplies to clean the house, any new furniture and/or appliances, these costs add up and can increase the cost of moving by more than you were prepared to pay.

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