Fees to Consider When Buying a Home
Mortgage brokers DO NOT always charge a fee, they have YOUR BEST INTEREST in mind and have the ability to send your deal to multiple lenders to obtain the best terms and rate for your situation.
Solicitor fees - Whether refinancing or purchasing, most solicitors will charge on average $1,000 - $2,000 to close on your file.
Realtor fees - Most purchasers don’t realize that realtor fees are paid solely by the seller. If the total real estate commission is 5% (average realtor commission), the seller is responsible for paying the listing agent (sellers realtor) and the purchasing agent (buyers realtor) the full commission. This does not come out of the purchasers pocket. When purchasing a property you should aways seek professional advice from a licensed realtor.
Broker fees - When obtaining financing from an A-lender (TD, RBC, Scotia, BMO, CIBC, Manulife, Desjardins, Meridian) or any other monoline lender you will not be required to pay a broker fee. Broker fees are only charged when a lender (B-lender, Private or Commercial) are not paying the broker directly. A broker will then charge a fee for their work on that specific file.
Lender fees - Much like broker fees, lender fees are traditionally only charged on B-lender, Private or Commercial files where the file is considered a riskier investment to the lender.
Transitional fees - Things don’t always go as planned. You may end up not being able to sell your home, having to pay for your existing mortgage at the same time, if you are renting you may have to cover a few months rent, moving costs should also be considered as well as storage costs. Ideally you’d like to have some cash on hand in the event that you need to cover any of these unexpected costs.
General house fees - Remember to expect the unexpected when it comes to your new home. Appliances, roofs, water tanks, furnace etc. these are all things to consider when purchasing a home.
Closing costs & land transfer tax
a. (resale) - When closing on a purchase you should budget for 2-3% of the purchase price for closing costs (this includes land transfer tax).
b. (builder purchase) - On a builder purchase these fees can vary tremendously. Always be wary of what is stated in the Agreement of Purchase and Sale in terms of development levies, educational levies and other fees associated with purchasing from a builder. When purchasing from a builder you should have your solicitor read through the Agreement of Purchase and Sale for any red flags.
If you have any questions or require further explanation based on any of the above please don’t hesitate to reach out to me. There are many things to consider when purchasing a new home.
