You’re on the homestretch of receiving funding for your mortgage! After getting an approval, meeting all conditions of your offer to purchase, you’ll have gotten to the last step of moving into your home. Closing with the lawyers. There are costs associated with finalizing the purchase, and my objective from this post is to prepare you so that there aren’t any surprises.
At this point, your lawyer will ask for a cheque with the down payment that you agreed to, minus any deposits you’ve already made.
Property Tax adjustments
Depending on when you move into your home, you will have to pay the difference of taxes for the year. The adjustment insures you’re not over or under paying depending on when you move in. The calculation can be confusing, but to put it simply; When the property is sold, if the taxes have been paid in full, than the buyer will owe the seller money for their share of the taxes. If the taxes have not yet been paid then the buyer will receive a credit for the seller’s share of property taxes. The lawyer will prorate and calculate to the day you take possession.
Depending when you move in, and what day you start making payments, you are responsible to pay the few days difference. (Ex. Take possession on the 25th of March but want to start making payments the 1st of April)
This varies from lawyer to lawyer. When shopping around for costs, make sure to clarify if the quote is only legal fees or does it include an estimated disbursements charge (Interest adjustment, tax adjustments etc.)
There could be more fees depending on the lender you are with, but the above are the most common closing costs. Of course one must also keep in mind any furniture purchases, blinds, any renovations that needs to be done etc.
Make sure to discuss with your lawyer, mortgage broker, realtor and anyone else involved, with any closing costs that you will incur. It’s best to protect yourself from any unpleasant surprises.