When you are in the market for a new home, having a healthy amount of savings is always a wise idea. In addition to a down payment on your mortgage, you will also need to save up for the costs that incur once you close the deal.
Your real estate agent, your lender and your legal obligations to the province will all require you to undergo actions that can cost only a small bit here or there. These will quickly add up.
To prepare you for this process when buying Vancouver Westside real estate, keep in mind these common closing expenses:
Home Inspection
A home inspection is not a formal component of closing, but it is something that is prudent to do either before or after making your offer. You will want to ensure that there are no latent issues with the property that have been left unaddressed.
Appraisal Fee
Your lender will want a property appraisal to assess the true value of the property. They are often not keen to cover this cost themselves, so you will either pay for it up front or as part of your mortgage fee.
Taxes
Remember that British Columbia will want her cut. Several taxes are incurred immediately upon closing. These include:
- Property transfer tax
- Goods and services tax — usually only applies to a newly-built custom home
- Property tax — the seller will often want you to reimburse them for the remainder of the year they have already paid
Mortgage Application Fee
Some lenders will charge a one-time fee as part of the lending process. Others may waive this charge depending on your credit or the loan you have chosen.
Title Insurance
Many lenders require title insurance as a condition of their mortgage. Disputes can arise as to property boundaries, mineral rights and similar things. Other times, the seller may have a lien that no one noticed and that would otherwise create complications. Title insurance protects you from many of these associated and unexpected costs.
Legal Fees
You will need a lawyer, notary public or certified closing agent in order to complete all of the paperwork required. They will obviously want to be paid for their services. You will also be required to pay any disbursements they have to make, such as the Land Title Registration fee.
There are other costs that can occur during the process, including Strata Cost Adjustments for condos or an insurance binder for proof of policy. The point is that you should always have a healthy cushion before committing to a real estate transaction. This prudence will go a long way towards helping keep the process smooth rather than bumpy.
For more advice on how to get into a new home without any unexpected road blocks, seek out one of our qualified agents. Take a look at our buying page to learn more.
