What Are Closing Costs?

 

Closing costs are the legal fees and other expenses you will need to pay when buying a new property.  Many homebuyers overlook these expenses.

Because these costs vary with each transaction, lenders use a standard 1.5% of the purchase price required for closing costs.   This is in addition to any down payment funds.

Closing costs can include:

  • Legal fees
  • Home Insurance
  • Appraisals
  • Home Inspection
  • Title Insurance
  • Property Transfer Tax
  • GST – Government Sales Tax (5% only on newly built homes)
  • Adjustments paid to the Seller

Let’s determine the closing costs needed by Jon Snow who is buying a new home for $675,000.

Jon Snow will be putting down 20%, or $135,000 toward his purchase.

Closing Costs = 1.5% of the purchase price ($675,000 x 1.5%) = $10,125

Total Funds Needed to Complete: $145,125 (to satisfy lender requirements, actual costs vary)

If you have any questions, contact Brent today or book a call-back time here.

 

North Van Mortgage Broker