If you’ve decided to buy a home, it’s important to go into the process knowing all of the costs involved beyond the asking price of the property.
Here’s an overview of costs involved.
Buying Costs *Mortgage Checklist*
REBGV Buying Costs
https://www.rebgv.org/news-archive/buying-costs.html
Mortgage application
Lenders may charge a mortgage application fee, which will vary depending on the lending institute.
Mortgage insurance
The federal government requires high-ratio mortgages (with less than 20% down payment ) to be insured against default. The cost ranges between 1.25 to 3.75 per cent of the mortgage amount which is added to the mortgage principal.
Appraisal fees
Before your lender approves your mortgage, you may be required to have an appraisal done. Sometimes your lender will cover this cost, if not, you are responsible. The fee ranges typically between $250.00 – $400.00.
Land survey fees
Lenders may require a survey of the property. Survey costs vary.
Home inspection fees
A home inspection is a report on the condition of the home that can alert you to any potential issues such as structural and moisture problems, as well as electrical, plumbing, roofing and insulation. Fees can range from $350 and up depending on the size of the home and the complexity of the inspection. Some inspectors have surcharges for the secondary suite, a crawlspace, over even an older home.
Home insurance
Buyers will a mortgage will be required to buy home insurance. To be safe, make the insurance effective on the earlier of either the completion date or the date that you pay the balance of the funds in trust.
Most lenders also require property buyers to carry fire and extended coverage insurance and liability insurance.
Legal or Notary Public fees
Legal or notary public fees and expenses will likely apply to assist with drafting documents and ensuring the title of the home is transferred properly and without incident.
Moving fees
Moving fees vary depending on the distance moved and whether professional movers do all of the packing. Rates vary.
Goods and Services New Housing Rebate (GST)
Fortunately, no matter where you live in Canada, if your new home is priced below $450,000 before GST/HST, you may be eligible for a partial rebate of the 5% GST portion.
The GST/HST New Housing Rebate amount changes on a sliding scale, depending on the purchase price of your home. For example, if it was priced at $350,000 or less, your GST might be reduced to just 3.5%. The only catch – the home must be your primary residence.
Provincial Sales Tax
The PST is generally not payable on services except for legal and notary fees. Both GST and PST are paid on legal notary fees.
Property taxes
Some lenders require property buyers to add property tax installments to monthly mortgage payments.
Pre-paid property taxes or utility bills
A buyer typically is required to reimburse the seller for any prepayments.
Mortgage life insurance
If the owner dies, this type of insurance will pay off the balance owing on their mortgage.
Fire and liability insurance
Most lenders require property buyers to carry fire and extended coverage insurance and liability
BUYING A HOME?
ADDITIONAL COSTS YOU SHOULD BE AWARE OF
Property Purchase Tax
Home buyers in BC pay a provincial Property Transfer Tax (PTT) when they buy a home.
(a) 1% of the Purchase Price on the first $200,000;
(b) 2% of the Purchase Price that exceeds $200,000 but does not exceed $2,000,000;
(c) 3% of the Purchase Price that exceeds $2,000,000;
(d) 5% of the Purchase price that exceeds $3,000,000; plus
(e) an additional Property Transfer Tax equal to 20 % of the Purchase Price apply to ‘foreign entities or a ‘taxable trustee’.
Property Transfer Taxes
After the tax due date (most lower mainland area taxes are due on the 1st business day in July) you will be required to pay a portion of the taxes for the balance of the year.
This also applies to utilities (water, sewer & garbage) if they are billed separately.
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax
Mortgages
Your mortgage lender may require an application fee and an appraisal fee
C.M.H.C charges a fee based on the amount of mortgage
Single Family Homes
The mortgage lender will require written proof of fire insurance coverage (an Insurance Binder). Most insurance agents charge a fee for an Insurance Binder, generally from $0 to $30.
The mortgage lender may require a Survey Certificate. If you are unable to obtain a copy of an existing survey from the Vendor or City/Municipality, a new one will cost approx. $200 plus GST.
Strata Title Homes
Strata Certificates required:
- Insurance Certificate – confirmation of insurance coverage on buildings & common property
- Form A – Certificate of Full payment of Maintenance Fees
- confirmation that strata fees are paid up to date
- Section 36 Certificate – sets out information on the Strata Corporation.
(the cost for all 3 certificates is usually between $30 & $60) - Some condominiums require you to pay a move-in fee of $50 to $100.
Legal Costs
Legal costs do vary. When requesting a quote ask that it include fees, all disbursements (the legal costs of searches, registration fees, couriers, photocopies, faxes, land title agent’s fees, etc.) and taxes (GST and PST) to be charged.