Planning For a Smooth Closing

You are thinking about the kind of house you want to buy and location. At the same time you are also thinking about how much you can afford for their payment. But there is another issue that you must consider when starting to think about buying a home: the closing costs.

These closing costs, which are charged to the buyer and the seller of credit research, processing of applications, the transfer of ownership, legal fees and insurance-must be paid in cash, in addition to the payment, and at the time of the loan application or close (sellers have closing costs too, and these are deducted from their earnings in the closure).

But do not panic. The key to a good compromise is to know what to expect from the beginning. Since closing costs vary considerably, it is equally important for you to compare services such as legal services, insurance and home mortgage rates, as it can save you hundreds of dollars.


Closing Costs-What are they?

After signing the Contract of Sale, can be several weeks or months before the closure. The transfer of ownership is usually handled by a lawyer or notary public. This is done to protect their interests as well as the interests of the seller and the lender.

Custom Local determines what he pays the taxes, while the buyer is responsible for the bulk of them. As closing costs usually amount to two or three percent of the purchase price, you will have to plan for these additional payments early. In making his task and discover that you may need, for example, $ 5000 from its cash reserves for closing costs, you will not be proceeding blindly in the transaction. Your Realtor, will be happy to tell you how to divide the costs of closure and what you should expect to pay.

Here is a list of some of the services for which you may be responsible.
Title Search:
A review of all documents recorded that affect the property to make sure the seller is the true owner of the house. The search is usually performed by a lawyer. Make your own comparison shopping calling some lawyers or have their Realtor request quotes from fees.

Study Certificates / Plot Plans:
A map detailing the size and location of the house within the property boundaries. Your lender may require this. The buyer pays for the study must be conducted by a licensed surveyor.

Attorney's Fees:
You will have to pay for his lawyer, who also could work for the lender. You will be liable for attorneys' fees and expenses such as the cost of mailing, photocopying, recording and transfer of mortgage rates: These are basically the cost of registration and transfer of property (Fee Simple Estate) in its name and registration its new mortgage.

Buying property tax:
A provincial tax of 1% on the first $ 200000 of 2% later with a reduced rate for first-time buyers.

Bank Fees:
Paid to lenders to cover administrative costs. They may include fees for processing or CMHC application fees, assessment fees.

Building inspection fees:
As explained in the last two weeks columns.

Homeowner's Insurance:
Lenders require that you purchase insurance against fire, flood, theft and other calamities. Shop around for the best coverage and price.

Property Taxes and Water and Sewage Rates:
The taxes are based on a calendar year, but collected in July. If you bought on March 31 you will receive a credit from the seller for 3 months of the taxes they owe, but have not been charged. If you bought on September 30 that will pay the seller for the month of October to December for taxes they have paid.

Taxes on goods and services:
If you buy a new building or a piece of land newly created and defined with the pen of a comprehensive taxation department as a development package.

Sellers fees may include some of the following:
Attorney fees to clear title of the financial burden, such as mortgages, charges or taxes and outstanding judgments. Property Commission; And payments agreed for the repair work.