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Are there any other (hidden) costs?
 April 24 2015     Posted by

Yes there are. A lawyer will need to search the title to the property so that he/she is able to certify to the lender that the security for the loan (the house) is what it is purported to be, i.e. that there are no nasty liens against it nor physical infringements upon the property itself which would take priority over (or cloud the rights transferred to the lender under the terms of) the mortgage, and that everything was registered properly in accordance with Canada’s real estate laws. The fee for this, along with the cost of a Title Insurance policy is likely to be anywhere from $1000 to $2000 depending upon the lawyer and the amount of work involved.

You will also be required to pay Ontario’s Land Transfer Tax. This tax is based on a graduated scale in accordance with the value of the home. For ease of reference it is usually estimated that legal fees, title insurance and land transfer tax will amount to approximately 1.5% of the purchase price. You will have to come up with this out of your own pocket, although first-time home buyers may apply for a Land Transfer Tax Rebate to a maximum of $2000.

The last item is the PST due on the mortgage default insurance. Although the premium itself may be capitalized into the mortgage, the 8% PST on it may not, so you will have to dip into your pocket again on the day of closing.

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