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Additional fees

Okay! Your mortgage choice is finally done. All that remains is eagerly waiting for moving day. But while waiting, here is a short list of expenses that you can expect when taking possession of your new home. Count on 3% to 4% of the purchase price for these costs:

Mortgage insurance premium (example SCHL/CANADA GUARANTY)

According to the National Housing Act, if your downpayment is lower than 20% of the purchase price, your mortgage must be covered by an insurance against payment default. These fees, which can vary between 0.60% and 4.50%1, can be added to the mortgage amount or be paid entirely when closing the loan. Note that it will also be necessary to add the 9% tax required on the mortgage insurance premium. Unfortunately this one cannot be added to the mortgage and must be paid in cash at the closing transaction with the notary.

Home insurance

In order to guarantee their loan, all financial institutions require that your home be insured for fire at the closing with the notary. Without this insurance coverage, there is no purchase. We suggest you consult an insurance broker for the best premium.

Evaluation fee

To determine the market value of your future property, the lending institution usually requires an evaluation be done by an expert. This ensures that the amount of the loan is realistic. This expense is generally covered by the lender. However, sometimes the purchaser must defray this cost, especially if it is a non-standard loan.

Legal fees

Of course, your new purchase must be immortalised on paper. This is why the services of a notary are essential. The notary will write up and register the sales and mortgage contracts. Then you will be able to sleep at night!

Certificate of location

Your bank will probably require a new certificate of location for the property you wish to purchase, especially if no certificate were produced since the cadastral reform of the territory of Quebec. This official and legal document must be prepared by a land surveyor. Generally, these expenses are the responsibility of the seller. In addition, there is a special clause in the offer to purchase written by the OACIQ and used by certified real estate mortgage brokers.

Welcome tax (property transfer tax)

The welcome tax is calculated on the purchase price or municipal evaluation, whichever is higher. It applies as follows: 0.50% for the first $50,000; then 1% for the next $50,000 to $250,000; and finally 1.5% above $250,000. Generally, this tax bill comes directly to your new home in the weeks following the closing.

Inspection fees

If you want to be sure about the condition of your next home, have it inspected by a professional building expert. Although the bank does not require this inspection, we highly recommend it to avoid any unpleasant and expensive surprises.

Moving costs

Moving expenses can vary greatly. If you can count your many friends, the costs could be limited to the price of a pizza, including a tip for the deliveryman… But, if you choose an all-included formula offered by many moving companies, the price will vary according to distance, date, availability of vehicles, etc. Shop around!

Other costs

Here’s a list of other expenses you could expect with the purchase of your new home:

  • City and school tax adjustments
  • Mortgage loan interest rate adjustment
  • The GST and PST on the purchase of a newly built property
  • Renovations for a used property
  • Mortgage life insurance (optional): in the case of the death of one of the spouse, the balance of the loan falls to zero and the residence remains the survivor spouse’s property
  • Telephone, electricity, cable, satellite and Internet connections
  • Oil or electric heating
  • Change of address
  • Basic decorating : painting, curtains, blinds, carpet cleaning or varnishing wood floors, etc.
  • Condominium fees (condominium)

1 Subject to change without notice

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