MORTGAGE DEFAULT INSURANCE
If you obtain a high-ratio mortgage (a mortgage where you pay less than 20% down payment) you will have to buy mortgage loan insurance from CMHC or a private company. If you qualify for a 5% down payment, CMHC charges an insurance fee that equals 3.75% of the mortgage. If you put 10% or 15% down, your insurance fees will decrease to 2.5% and 2% respectively. The insurance premium is usually added to your mortgage principal amount on closing, this way you do not have to come up with the additional amount of the insurance premium. For more information visit: Canada Mortgage and Housing Corporation
MORTGAGE APPLICATION FEE
This fee varies between lending institutions. CMHC’s standard fee is $235 +HST. CMHC also offers a basic service for a $75 + GST but it must be accompanied by an appraisal.
PROPERTY TAX AND UTILITY BILLS
If the current owners have already paid the full years property taxes to the municipality, you will have to reimburse them for your share of the years taxes. Property taxes are calculated from Jan – Dec and are paid at the end of June.
Most lending institutions require an appraisal of the property before approving your loan, confirming that the loan reflects fair market value. The fee ranges from $150 – $350 + GST.
GST/HST AND THE CONSTRUCTION INDUSTRY
As of April 1, 2013, BC replaced the 12% HST with the GST at the rate of 5% and a provincial sales tax. Transitional rules, including the BC transition tax, apply to certain transactions for housing that straddle that date. The BC transition tax rebate is available in certain situations where the transition tax applies.
The B.C. transition tax (a temporary provincial tax for new housing) will generally be payable by purchasers of new housing if the GST becomes payable on the purchase on or after April 1, 2013, and before April 1, 2015, and the construction or substantial renovation of the housing was at least 10% completed before April 1, 2013. The transition tax will generally be equal to 2% of the purchase price.
It is recommend that you get a home inspection by a certified home inspector. The fee ranges from $400 – $700 +GST.
Your lender may require an up to date survey of the property. The survey insures that the building are within the borders of the property and there are no encroachments. If the Seller did not provide you with one, you will have to pay to have one done. The fee ranges from $150 – $350 + GST.
The transfer of a home ownership from the seller to the buyer must be recorded in the Land Title and Survey Authority office in order to protect the new owner’s interests. You will need a lawyer or a notary to act on your behalf. The lawyer or notary will charge a fee for this service, plus disbursements, including the Land Title Registration Fee. The fees for closing the sale range according to the complexity of the deal. The fee ranges from $400 – $1500 + GST.
FIRE AND LIABILITY INSURANCE
The mortgage lender will insist that you purchase an insurance policy which guarantees that in the event of fire the lender will receive the balance owing on the mortgage loan before you receive any insurance proceeds.
For Condo’s. If the current owner has prepaid strata fees, adjustment will be made by your lawyer or notary.
• fire and liability insurance
• Moving Expenses
• Property Taxes
• Strata fees (for condo’s)
• Deposit required by utility companies