There are a number of expenses associated with purchasing a home. The inspection and legal fees are a part of what is referred to as closing costs. Your mortgage specialist will likely tell you to estimate these costs at 1.5% of the purchase price. This figure is only an estimate as some of these costs may not be needed in your particular situation.
Here is a list of items which I have prepared that you may encounter (Where possible I have provided a cost however, these costs are merely estimates based on averages that I have observed in the Fredericton and Oromocto area you may find some providers who charge more or less)
Legal fees – this is the fee the lawyer will change for his services to research and transfer the title and funds. $600+/- (legal fees)
Title Insurance – protects you against defects in the title of your property your lawyer or your mortgage lender will be able to provide you the details should this be necessary. $350+/-
Appraisal Fee – this may be required by the mortgage lender to confirm the value of the property. $350+/-
Home Inspection – making a home inspection a condition of the Agreement of Purchase and Sale is always recommended. Again, this cost will vary with the inspector and size of the home. $350-500 +/-
Survey – if is required then this cost can vary as this cost depends on the size of the property to be surveyed. Many people choose to purchase title insurance in lieu of having a survey. However, to weigh the pros and cons of getting a survey or just purchasing title insurance it is best to discuss this with your lawyer. 500++
Adjustments on closing – if the vendor has prepaid any items to which you will receive the benefit such as oil, propane, water and property taxes then the vendors will be reimbursed on closing day for the portion that you will be utilizing.
Land transfer Tax – this is paid by the purchaser and is handled by the lawyer (.25% of purchase price) eg. $170,000 property land transfer tax is $170,000.00 x.25% = $425.00
Home Insurance – this must be in place on closing day in order for the bank to provide a mortgage. The cost of the also depends on the value of the home and as well, varies on the contents that you will insurance (300+)
Service hook up charges – cable, phone and electricity may also require a deposit.
Moving expenses – moving locally you may be able to do it without hiring movers by enlisting friends and family however expect to pay $400+ to hire professional movers
Purchasing a condominium – you may have an Estoppel Certificate fee, contingency fees, monthly condo fees, and perhaps reserve fund fees to pay.
Some other things to consider - You may wish to put aside an amount for personalizing your new home with paint, décor and window treatments. If you are purchasing an older home rather than new, then you should be prepared for increased home maintenance expenses and repairs.
Here is a Worksheet that you can use to help you budget for your closing costs in addition to your Down Payment. (.pdf format)
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