Homebuyers

Closing & Finalizing Your Mortgage


TERMS


When you and the seller come to an agreement on the price to be paid for the house, you must provide a deposit. A deposit is an advance payment of part of your down payment and is paid at the time of signing the Agreement of Purchase of Sale, a legal document the buyer and seller approve detailing the price & terms of the transaction.

When negotiating the cost of the house you want to purchase, it is important to keep in mind that you will also be required to pay property tax. Property tax is paid on privately owned property and is usually paid semi-annually or monthly. The amount is based on local tax rates and assessed property value.

Other than the deposit and down payment, you should keep in mind that you will likely also be paying for a home inspection - an examination of the structure and mechanical systems to determine a home’s safety and makes the potential homebuyer aware of any repairs that may be needed. If a purchaser requires a mortgage loan to complete the transaction, a home appraisal is usually required to determine “fair market value” of the property. The purchaser may also be required to pay the fee for the appraisal. 

Also, talk to your mortgage professional and consider insurance protection against your mortgage in case of death, accident or illness. There are many insurance options to choose from.



CLOSING COSTS

  • Appraisal Fee
    The process of assessing the value of a home, usually to determine a selling price. This value may or may not be the same as the purchase price of the home.
  • Deposit
    Money that is put towards the purchase of a home, to prove the buyer is committed to fulfilling the purchase transaction. The amount of the deposit varies based on the purchase price.
  • Down Payment
    A partial payment made at the time of purchase. First-time home buyers are allowed to put as little as zero down when purchasing a property.
  • Home Inspection Fee
    The cost paid to a building inspector to have an examination of the house prior to purchase, usually selected by the purchaser.
  • Land or Property Transfer Tax
    A tax paid on property that changes hands. First-time buyers may be eligible for a rebate in certain provinces.
  • Legal Fees
    The cost paid to have a lawyer finalize the property transfer between the seller and the purchaser.
  • Mortgage Loan (Default) Insurance
    Mortgage loan insurance enables homebuyers to purchase a home with as little as 5% down payment. The amount of the insurance premium depends on the amount borrowed from the lender.
  • Title Insurance (optional)
    Title Insurance provides the purchaser with coverage against title risks inherent in real estate transactions (including title fraud) for as long as you own your home. In many cases, it is required by the lender that the borrower has title insurance to provide coverage for the lender. It is recommended by most lawyers that the borrower also gets additional coverage for themselves.



WHAT YOU WILL NEED TO FINALIZE YOUR MORTGAGE

You will be required to provide the following list of information to your mortgage professional to finalize the mortgage:

  • Valid identification
  • Confirmation of income or employment earnings
  • Current bank information
  • Evidence of your down payment
  • List of assets
  • List of liabilities
  • Contact information for your lawyer
  • Copy of the Purchase Agreement
  • Copy of the MLS listing
  • Contract and building plans if your home is being built
  • Authorization to perform a credit bureau inquiry
  • Letter from the insurance company
    • indicating sufficient property insurance coverage for the new purchase
    • showing the lender as a lien holder should be added