Sonia asked:


                Home buyer’s costs or closing costs are the expenses in relation to yourith your purchase of a home. Both the buyer and the seller pay the closing costs’ depending on what is written in the contract of sales and what both agreed on. Some of these costs are paid upon closing the deal and others as your transaction progresses.

                Home buyer’s costs are explained below.  Some closing costs may or may not be applicable depending on the custom of the area where you make your home purchase.

1.  Tax Fees. A property will not be transferred to your name unless you pay the tax fee. Exact cost depends on the location of the property. Most commonly, the tax is one percent on the first two-hundred thousand of the value of the property and two percent in excess of the two-hundred thousand value.

2.  Goods/Service Tax. When you purchase a newly constructed house, you will pay the Goods and Service Tax, or the GST. The price depends on the area and the rates applied.

3. Property Tax. If the current owner of the home you are negotiating to buy has already paid the property tax for the year, you have to reimburse them as your share of the year’s taxes.

4. Appraisal Fee. This is a fee required by the lending institution home before they approve your loan.

5. Survey Fee. Your mortgage lender will require you to submit a land survey form. The survey form serves to establish the boundaries of the property. If the current owner does not have one, you will have to contact a surveyor and pay him or her for surveyor’s fees.

6. Mortgage Application Fee. Most mortgage lender require you to pay an applicationa fee once you apply for a mortage loan. The fee varies, depending on the mortgage lenders rate.

7.  Mortgage Default Insurance.  This insurance is required on mortgages that exceeds the seventy-five percent of the appraised property value. This serves to ensure that the lender will not lose money in the event that you cannot pay your mortgage and your property value is not sufficient to pay the mortgage.

8. Fire Insurance. Your mortgage lender will insist that you purchase an insurance policy. This is a guarantee to them that in case of fire, they will receive whatever balance you have on your loan before you receive any insurance proceeds.

9. Legal Fees.  When transferring the property to your name, this will be recorded in the Land Title Office. You may hire the services of a lawyer of a notary public to act for you on this matter.

10. Other Fees.  Your home buyers’ costs may include the moving expenses like hiring a professional moving company or do the moving yourself.  Expect additional expenses on repairs, purchase of new appliances, curtains or carpets.  

It is best to consult the exact fees in the area you plan to buy a new home. Be sure you have this home buyer’s costs covered in your budget as you start hunting for a home.

 

 

 

 

 

 

 

 

 



LELAND