Vancouver Home Mortgage Closing Costs – Consult with Bruce Coleman, Vancouver Mortgage Broker
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Vancouver Home Mortgage Closing Costs
Many first time home buyers in Vancouver might not be fully aware about what is involved in closing costs. Although you might have factored in your down payment and what you will be paying for the mortgage, there are also some relatively expensive closing costs that you need to have included in you budget.
The closing costs that you need to consider are not included in just a single payment but include a host of different entities that are involved in the purchase of a new home.
How Expensive Are Closing Costs?
This is some variance in how expensive closing costs can range but most mortgage experts suggest that you budget anywhere from 1 % to as high as 2.5 % of the purchase value of the home you are buying.
This means that if you are buying a home worth $500,000 you might have to budget yourself for an additional $5,000 to as much as $12,500 to have on hand to cover all your closing costs.
These closing costs will not occur all at once, and will be spread out through the mortgage application, approval and closing process.
What do Vancouver Closing Costs Include?
Here are the most common items that comprise closing costs and extra expenses that you will incur.
· Appraisal Fee
This is the fee the bank charges to have the new home appraised. The bank will initially absorb the cost but ultimately they will bill you for it in their closing cost statement.
· Your Credit Report
When you apply for a mortgage, the lender will always perform a credit check on you and you will be charged for obtaining this report.
· Fees for Mortgage Application and Processing
You will be charged a fee by the lender for processing the mortgage application.
· Cost of a Property Survey
Any home being purchased will require a property survey to be performed so that it includes any improvements which have been added since the last survey and which will affect the amount of property taxes levied by the municipality.
· Home Mortgage Insurance and PST/GST
If your down payment is less than 20% of the purchase value of the home then you will be required by the lender to incur the additional expense of mortgage insurance. This will be an expense above and beyond the amount you will be paying for your mortgage and will be added onto your mortgage balance.
· Property Title Insurance
Most lenders will also require that you obtain property title insurance should you incur any legal claims against your title of property ownership.
· Disbursements and Legal Expenses
When a property is purchased you will require using the services of either a notary public or a real estate lawyer to represent your interests when buying a property.
· Land Registry Tax
When the title if a property is transferred you will also have to pay the tax which is levied by the province for this transference.
· Home Inspection
You will most likely use the services of a licensed home inspector before you take possession of the home to ensure there are not any major structural or other problems. This expense may cost from between $300.00 to as much as $450.00.
· Adjustment on your Interest
Should you obtain your mortgage before month’s end, you may also be responsible to incur the interest cost for the remaining portion of that particular month.
· Life and Home Insurance
Most lenders require that you have sufficient life insurance on your mortgage so that it will be covered if you die unexpectedly. Also, you will be required to get a home insurance property to cover the home should it be damaged or destroyed as a result of a loss. You will also want to include your personal possessions in an insurance package.
Additional Closing Costs
Most of the closing costs listed above are fairly standard for any home purchase but there may be additional cost which you will be responsible for the following:
· Expenses for Levies
If you are moving into a new subdivision an additional levy may also be charged by the municipality.
· Warranty for New Homes
Most new homes which are constructed require that you also buy a warranty to ensure that the builder has built the home in accordance to provincial regulations.
