Real Estate Closing Costs
When purchasing a home, over and above the down payment you must budget for closing costs. It is important to note that not all of these costs are incurred with all mortgages.
Property Transfer Tax
In BC the tax is 1% on the first $200,000, plus 2% on the remainder. First time buyers qualify for a full exemption if the property purchase price is less than $475,000.
Lenders may require an appraisal to confirm the property value. A typical appraisal cost is $250-$300 (An appraisal is not required if you have less than 20% down)
A lawyer or notary will help protect your interest by reviewing your purchase agreement, searching the property title, and ensuring all documents are completed properly. Legal fees are typically $800 - $1000.
An inspection can make you aware of issues related to a homes structure, systems, plumbing and electrical, and make recommendations if required. Fees range from $400 - $600.
If the seller has paid the property taxes, water bills, or utilities in advance, you’ll need to reimburse these costs at closing.
Title insurance can safeguard you against fraud and problems with your property title. Title insurance is not mandatory but is required in some purchase scenarios. The cost is around $300.
Mortgage Life Insurance
Mortgage life insurance is an optional life insurance policy on the homeowner which will allow their family or dependents to pay off the mortgage on their home should something tragic happen to them. Mortgage life insurance is meant to protect the family of a homeowner and not the mortgage lender.