How Much Money do I Need to Buy a Home? (Please Don’t Use the 1.5% Guideline)
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searches in land databases that cost money
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registration fees to put a mortgage on title
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title insurance
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courier charges
If it is the end of April, and the owner decided to pay all taxes in full, you would need to bring in an extra $2,400 to pay the owner back for the taxes paid from May onward. If the taxes were not paid, you would get a $1,200 credit, but would be responsible for property taxes for the year. If they are on TIPPS (the monthly tax instalment plan from the city) the adjustment may be minimal, but then you would be responsible for the remaining 8 months of taxes owing.
Clear. As. Mud. Again, ask as many questions as you need to make this clear. My staff and I have dealt with it all before.
At times, the lender will deduct amounts right off of the mortgage amount that is being lent to you. These include things like title insurance, appraisals, and service fees for wiring cash to our office. Each lender is a little bit different on the fees they charge. They may also holdback a portion of the cash for other costs, like an interest adjustment deduction. This is where they hold back an amount representing the interest to be charged between the date that we receive the money, and their ‘interest adjustment date’. They may also hold back an amount to cover the funds necessary to adequately fund tax account if they are paying property taxes on your behalf.
We find out about this stuff when we get your mortgage instructions, which can be fairly late in the transaction. Make sure to ask your mortgage broker or specialist about whether any of these things will apply to you.
CMHC fees (or lender insurance fees) – While these amounts are paid by you over time, they simply get added to the amount of the loan. There is no need to come up with the cash for this when closing a purchase. However, they do get paid as part of your regular mortgage payments.
Coffee at my office – It may not be the greatest stuff, but it is full of caffeine. Perfect for those next few weeks of packing up your stuff and sorting through old photo albums.
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