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In the final week of our series on the 10 most commonly asked mortgage questions this week we look at closing costs & mortgage payment caluculations. The blog is written by our guest blogger, John Eivindson, from Dominion lending, who services Gabriola, and has provided a wealth of information on lending practices.
How much will I have to pay for closing costs?
As a general rule of thumb, it’s recommended that you put aside at least 1.5% of the purchase price (in addition to the down payment) strictly to cover closing costs. There are several items you should budget for when it comes to closing costs. Property Transfer Tax is charged whenever a property is purchased. The tax will vary from jurisdiction to jurisdiction, but I can help with the calculation. GST/HST is only charged on new homes, and does not affect homes priced at less than $400,000. Even homes that exceed the price threshold are only taxed on the portion that exceeds $400,000. Certain conditions may apply. Please contact you lawyer/notary for more detailed information. Your lawyer/notary will charge you a fee for drawing up the mortgage and conveyance of title. The amount of the fee will depend on the individual that you use. The typical cost is $900. If you’re purchasing a single-family home, you’ll need to give your lender a survey certificate showing where the property sits within the property lines. Some exceptions are made, however, on low loan-to-value deals and acreage properties. A survey will cost approximately $300-$350, but the lender will often accept a copy of an existing survey. Other costs include such things as an appraisal fee (approximately $200), title insurance and a home inspection (approximately $350).
How much will my mortgage payments be?
Monthly mortgage payments vary based on several factors, including: the size of your mortgage; whether you’re paying mortgage default insurance; your mortgage amortization; your interest rate; and your frequency of making mortgage payments.
Saturday, April 7, 2012
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It is indeed a very important mortgage question. Lots of people apply for mortgages every year. However, they don’t know how much they'll have to pay for closing costs. They pay whatever the mortgage lenders ask them to pay. But, personally speaking, I feel everyone should know how much they need to save for the closing cost from beforehand. This will help them to avoid unnecessary problems.
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