What are the closing costs associated with buying a house?
When purchasing a house in Canada, additional fees and expenses are known as closing costs. It's essential to know these costs, including land transfer tax, legal fees, home inspection fees, title insurance, appraisal fees, mortgage insurance, moving expenses, and utility hook-up fees.
Land transfer tax varies depending on the property's location and purchase price and is paid by the buyer upon closing. Depending on the complexity of the transaction, legal fees can range from $500 to $1,500 or more.
A home inspection fee typically ranges from $400 to $800 and is recommended to identify any potential issues with the property. Title insurance protects against defects or problems with the property's title and costs between $250 and $500.
The lender may require an appraisal fee to determine the market value, which usually ranges from $250 to $500.
Mortgage insurance is necessary if a down payment is less than 20%, with cost varying based on down payment size and purchase price.
Moving expenses may also be incurred when relocating belongings to the new home.
At the same time, utility hook-up fees may need to be paid for electricity, gas, and water services. Including these costs in your budget is essential when figuring out how much you can afford to spend on a house.