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How much will the house really cost me?
By: kanjis

How Much will it Really Cost?
Once you have figured out the home price range you can afford and the type of mortgage you qualify for, you will need to calculate all of the associated costs of the transaction to make sure you are financially ready.

Up-Front Costs
You will need to plan ahead to cover the many up-front costs of buying a home. Timing is important to help make sure things go smoothly.

Mortgage Loan Insurance Premium. If yours is a high ratio mortgage (less than 25% down payment), you may need mortgage loan insurance. To get this insurance, you will be asked to pay the required insurance premium. Your lender may add the mortgage insurance premium to your mortgage or ask you to pay it in full upon closing.

Appraisal Fee. Your mortgage lender may require that the property be appraised at your expense. An appraisal is an estimate of the value of the home. The cost is usually between $250 and $350 and must be paid when you contract for those services.

Deposit. This is part of your down payment and must be paid when you make an Offer to Purchase. The cost varies depending on the area, but it may be up to 5% of the purchase price. If you wish to make a down payment of 5% and you give a deposit of 5%, then your down payment is considered to be made.

Down Payment. At least 5% of the purchase price is usually required for a high-ratio mortgage and at least 25% of the purchase price is usually required for a conventional mortgage.

Estoppel Certificate Fee (not applicable in Quebec). This applies if you are buying a condominium or strata unit and could cost up to $100.

Home Inspection Fee. Remember that this may be a condition
of your Offer to Purchase. A home inspection is a report on the condition of the home and may cost over $200, depending on the complexities of the inspection. For example, it may be more costly to inspect a home that has large square footage, one that is expensive or one where contaminants such as pyrite, radon gas or urea-formaldehyde are suspected.

Land Registration Fees (sometimes called a Land Transfer Tax, Deed Registration Fee, Tariff or Property Purchases Tax).You may have to pay this provincial or municipal charge upon closing in some provinces. The cost is a percentage of the property's purchase price and may vary. Check with your lawyer/notary to see what the current rates are.
Prepaid Property Taxes and/or Utility Bills. To reimburse the vendor for pre-paid costs such as property taxes, filling the oil tank, etc.

Property Insurance. The mortgage lender requires this because the home is security for the mortgage. This insurance covers the cost of replacing the structure of your home and its contents. Property insurance must be in place on closing day.
Survey or Certificate of Location Cost. The mortgage lender may ask for an up-to-date survey or certificate of location prior to finalizing the mortgage loan. If the seller does not have one or does not agree to get one, you will have to pay for it yourself. It can cost in the $1,000 to $2,000 range.
Water Quality Inspection. If the home has a well, you will want to have the quality of the water tested to ensure that the water supply is adequate and the water is potable. You can negotiate these costs with the vendor and list them in your Offer to Purchase.

Legal Fees and Disbursements. Must be paid upon closing and cost a minimum of $500 (plus GST/HST).Your lawyer/notary will also bill you direct costs to check on the legal status of your property.

Title Insurance. Your lender or lawyer/notary may suggest title insurance to cover loss caused by defects of title to the property.

If you feel you cannot cover all of the up-front costs, you can ask your lender for a loan. Remember that payment for this loan amount, based on a 12-month repayment period, will have to be included in your

Other Costs
Besides up-front costs, there are other expenses to consider:
1. Appliances. Check to see what comes with the house, if anything.
2. Gardening equipment.
3. Snow-clearing equipment.
4. Window treatments. Check to see what comes with the house.
5. Decorating materials. Paint, wallpaper, flooring and tools for redecorating.
6. Hand tools. You will need some basic hand tools for your new home.
7. Dehumidifier. May be required to control moisture levels, especially in older homes.
8. Moving Expenses.
9. Renovations or Repairs.
10. Service Hook-Up Fees. Charged for utilities. You may be required to pay a deposit for utilities such as telephone and heating services.
11. Condominium Fees. You may have to make the initial payment for these monthly fees.

article.php?id=144

panasia1234
Member since: Sep 06

Posts: 1
Location: IMMIGRATION CONSULTANT
Post ID: #PID

Posted on: 28-09-06 13:40:35

Article is located here: http://www.canadiandesi.ca/article.php?SID=4&AID=144" rel="nofollow">LINK
YOU SAID "insurance premium to your mortgage or ask you to pay it in full upon closing" THIS IS WRONG .THIS IS INSURANCE AND PAID LIKE CAR INSURANCE PREMIUM. FOR EXAMPLE THE MORTGAGE IS ABOUT 274000/ $ THAN THEY WILL ADD ABOUT 7300/- AS INSURANCE PREMIUM SO THIS WILL ADDED TO MY MORTGAGE AND WHEN I SELL THE HOUSE AFTER A YEAR .I WILL PAY ONLY TOTAL 245 $ PREMIUM INCHUDING FINE ON PRO RATA BASIS CANCELLATION OF POLICY. MOSTLY BROKERS DID NOT KNOW ABOUT THIS .I ASKED SO MANY BCMHC’s Mortgage Loan Insurance is an insurance that covers your lender’s risks associated with financial loss that can occur when a homeowner defaults on their mortgage loan and in turn increases your access to mortgage financing and at the most competitive interest rates possible.
As with any insurance, there are insurance premiums to be paid. The amount of the premium varies and can range between 0.65% and 2.75% depending upon how much of the purchase price/home value is financed with a mortgage loan.
Mortgage loan insurance is not to be confused with mortgage life insurance which guarantees that your remaining mortgage at the time of your death will not be a burden to your estate.
How Much Does CMHC Mortgage Loan Insurance Cost?
To obtain CMHC Mortgage Loan Insurance, lenders pay an insurance premium. Typically, your lender will pass these costs on to you. Your lender will give you the exact price when you apply for a mortgage.
The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums.
Remember: without mortgage insurance you may avoid the insurance premium but you’ll typically pay much higher interest rates and additional administrative fees. At the end of the day, for the vast majority of borrowers, the cost of CMHC Mortgage Loan Insurance is more than fully offset by the savings achieved.
Table of CMHC Mortgage Loan Insurance Premiums
Loan Size
(% of Lending Value) Single Advance Premium
(% of Loan)
Up to and including 65% 0.50%
Up to and including 75% 0.65%
Up to and including 80% 1.00%
Up to and including 85% 1.75%
Up to and including 90% 2.00%
Up to and including 95%
Traditional Down
Payment Flex Down 2.75%
2.90%
ROKERS BUT ALL HAVE NO IDEA.

Garvo Gujarati
Member since: Nov 01

Posts: 3116
Location:
Post ID: #PID

Posted on: 29-09-06 09:53:34

Panasia1234,

Well come to the board!

My comment is not realted with this article, but I saw you location as immigration consultant. Can you please write your physical location there and put immigration consultant in the signature?

-----------------------------------------------------------------
A Proud Indian Canadian

Pramod Chopra
Member since: Sep 03

Posts: 1284
Location: Pickering, ON
Post ID: #PID

Posted on: 29-09-06 12:20:54

Quote:
Originally posted by panasia1234

Article is located here: http://www.canadiandesi.ca/article.php?SID=4&AID=144" rel="nofollow">LINK
YOU SAID "insurance premium to your mortgage or ask you to pay it in full upon closing" THIS IS WRONG .THIS IS INSURANCE AND PAID LIKE CAR INSURANCE PREMIUM. FOR EXAMPLE THE MORTGAGE IS ABOUT 274000/ $ THAN THEY WILL ADD ABOUT 7300/- AS INSURANCE PREMIUM SO THIS WILL ADDED TO MY MORTGAGE AND WHEN I SELL THE HOUSE AFTER A YEAR .I WILL PAY ONLY TOTAL 245 $ PREMIUM INCHUDING FINE ON PRO RATA BASIS CANCELLATION OF POLICY. MOSTLY BROKERS DID NOT KNOW ABOUT THIS .I ASKED SO MANY BROKERS BUT ALL HAVE NO IDEA.

Hi Panasia 1234,

Please do not misinform general members about the MORTGAGE LOAN INSURACE premium when you DO NOT have your facts correct.

This is mortgage default insurance and you pay the premium up front (either by yourselves or it can be paid by the lender on your behalf and added to your mortgage) for the full amortization of 25 years or more as the case may be but if you happen to sell the house after 6 months, 1 year or even the next day you will not get any premium back.

This premium is CERTAINLY NOT like a car insurance premium where you pay either half yearly or yearly premium and which keep on changing at every renewal.

However, You can certainly port the premium to a new property subject to certain conditions but under no circumstance you get a pro-rata refund of the premium.

Should you have any doubts please either contact CMHC or GENWORTH, the two leading mortgage default insurance providers and check with themselves and please post here what you hear from them. The website addresses are as follows: http://www.cmhc.ca" rel="nofollow">LINK and http://www.genworth.ca" rel="nofollow">LINK

-----------------------------------------------------------------

Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

Pramod Chopra
Member since: Sep 03

Posts: 1284
Location: Pickering, ON
Post ID: #PID

Posted on: 03-10-06 12:54:04

Quote:
Originally posted by panasia1234

Article is located here: http://www.canadiandesi.ca/article.php?SID=4&AID=144" rel="nofollow">LINK
YOU SAID "insurance premium to your mortgage or ask you to pay it in full upon closing" THIS IS WRONG .THIS IS INSURANCE AND PAID LIKE CAR INSURANCE PREMIUM. FOR EXAMPLE THE MORTGAGE IS ABOUT 274000/ $ THAN THEY WILL ADD ABOUT 7300/- AS INSURANCE PREMIUM SO THIS WILL ADDED TO MY MORTGAGE AND WHEN I SELL THE HOUSE AFTER A YEAR .I WILL PAY ONLY TOTAL 245 $ PREMIUM INCHUDING FINE ON PRO RATA BASIS CANCELLATION OF POLICY. MOSTLY BROKERS DID NOT KNOW ABOUT THIS .I ASKED SO MANY BCMHC’s Mortgage Loan Insurance is an insurance that covers your lender’s risks associated with financial loss that can occur when a homeowner defaults on their mortgage loan and in turn increases your access to mortgage financing and at the most competitive interest rates possible.
As with any insurance, there are insurance premiums to be paid. The amount of the premium varies and can range between 0.65% and 2.75% depending upon how much of the purchase price/home value is financed with a mortgage loan.
Mortgage loan insurance is not to be confused with mortgage life insurance which guarantees that your remaining mortgage at the time of your death will not be a burden to your estate.
How Much Does CMHC Mortgage Loan Insurance Cost?
To obtain CMHC Mortgage Loan Insurance, lenders pay an insurance premium. Typically, your lender will pass these costs on to you. Your lender will give you the exact price when you apply for a mortgage.
The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums.
Remember: without mortgage insurance you may avoid the insurance premium but you’ll typically pay much higher interest rates and additional administrative fees. At the end of the day, for the vast majority of borrowers, the cost of CMHC Mortgage Loan Insurance is more than fully offset by the savings achieved.
Table of CMHC Mortgage Loan Insurance Premiums
Loan Size
(% of Lending Value) Single Advance Premium
(% of Loan)
Up to and including 65% 0.50%
Up to and including 75% 0.65%
Up to and including 80% 1.00%
Up to and including 85% 1.75%
Up to and including 90% 2.00%
Up to and including 95%
Traditional Down
Payment Flex Down 2.75%
2.90%
ROKERS BUT ALL HAVE NO IDEA.

Hi Panasia1234,

I hope you must have verified by the both mortgage default insurace providers and found out that what you posted in your very first post was incorrect.

However, instead of replying furhter in the thread you chose to edit your first post which is now not making any sense at all.

Please let the board know clearly that you want to convey.

-----------------------------------------------------------------

Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

pksatpathy
Member since: Apr 04

Posts: 131
Location: Brampton
Post ID: #PID

Posted on: 03-03-07 17:31:37

Pramodji,
Does the premium sales tax levied on "mortgage default insurance"premium? If yes how much?

Thanks

-----------------------------------------------------------------
PKS

Pramod Chopra
Member since: Sep 03

Posts: 1284
Location: Pickering, ON
Post ID: #PID

Posted on: 03-03-07 20:20:16

Quote:
Originally posted by pksatpathy

Pramodji,
Does the premium sales tax levied on "mortgage default insurance"premium? If yes how much?

Thanks

Hi pksathpathy,

It is not the premium sales tax but the provincial sales tax which in Ontario is 8% and is paid at the time of closing to the lawyer who remits it to the government.

-----------------------------------------------------------------

Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

pksatpathy
Member since: Apr 04

Posts: 131
Location: Brampton
Post ID: #PID

Posted on: 04-03-07 12:22:08

Hi pksathpathy,

It is not the premium sales tax but the provincial sales tax which in Ontario is 8% and is paid at the time of closing to the lawyer who remits it to the government.

Oh.. i mean the sales tax for the default insurance premium..
Thanks Pramodji for your info.

-----------------------------------------------------------------
PKS

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