How Much Should I Expect to Pay On Closing Costs?
If you’re looking to
buy your first home, or trading up to a larger one, there are many costs – on
top of the purchase price – that you must figure into your calculation of
affordability. These extra costs, such as taxes and other additional fees, could
surprise you with a financial nightmare on closing day if you’re not informed
and prepared. Below you will find estimates
on both Closing Costs (fees and expenses charged at closing) and Possible
institution may request an appraisal of the property, which would be your
responsibility to pay for. Appraisals can vary in price from approximately $150
When the home you
purchase is a resale, your lending institution may ask for an updated property
survey. The cost for this survey can vary between $600- $1,200.
Home insurance covers
the replacement value of your home. Your lending institution will request proof
that you are insured as it protects their investment on the loan.
Even the simplest of
home purchases should have a lawyer involved to review all paperwork. Shop
around, as rates vary greatly depending on the complexity of the issues and the
experience of the lawyer. Remember… A real estate purchase is usually the
largest financial decision anyone will make, don’t avoid legal advice as it may
cost you greatly down the road.
Mortgage Brokers Fee
A mortgage broker is
entitled to charge you a fee in order to source a lender and organize the
financing. However, it pays to shop around because many mortgage brokers will
provide their services free to you by having the lending institution pay for
Property Transfer Tax
This tax is applied
whenever property changes hands and the amount that is applied can vary.
This is another service that your agent can help you
with. Usually a good agent knows who the reliable and licensed area inspectors
are. The fee for this service also varies depending on the type of inspection.
I cannot stress enough how important it is that every buyer use this service.
The information can not only alert you to drastic foundation, roof or plumbing
issues but also address issues that you will have to deal with later so you
know what you are in for before you take possession.
Additional Fee’s to Consider…
The cost for a
professional mover can cost you in the range of:
$75-$200/hour for a
van and 3 movers, and
10-20% higher during
peak demand seasons. Using a licensed and properly insured company is good
Mortgage Loan Insurance Fee
Depending upon the
equity in your home, some mortgages require mortgage loan insurance. This type
of insurance will cost you between 0.5% to 4% of the total amount of the
mortgage. Usually payments are made monthly in addition to your mortgage and
Depending on your down
payment, your lending institution may decide to include your property taxes in
your monthly mortgage payments. If your property taxes are not added to your
monthly payments, your lending institution may require annual proof that your
taxes have been paid.
Condos charge monthly
fees for common area maintenance such as grounds keeping and carpet cleaning in
hallways. Homeowners associations may
charge monthly or yearly fees depending on the level of services they provide. Costs
will vary depending on the building and associating type.
If the town you live
in has made local improvements (such as the addition of sewers or sidewalks),
this could impact a property’s taxes by thousands of dollars.