Closing costs on a pre-construction in Ottawa
The pre-construction would be on the east end of Ottawa, somewhere in the Orleans area. I'm also a first time home buyer.
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Jan 30th, 2020 9:36 am
That's nearly $12k in closing costs. Which of these things can be rolled into the mortgage? I know the PST on the mortgage insurance can't be, but what about the rest?skeet50 wrote: ↑ Some of the most common closing costs in Ottawa are:
Legal Fees: $750 and up
Disbursements: $475 and up
Title Insurance: varies as it depends on if you are getting a mortgage and the mortgage lender wants you to purchase it's title insurance budget $1200 and up
Land Transfer Tax: On $550,000 is $7,475 as a first time buyer you are eligible for a $4000 rebate so $3,475
Tarion Fee: Some builders have you pick up the Tarion fee: at $550,000 is approximately $1,025
Mortgage Default Insurance: If you are paying less than 20% down, you have to pay mortgage default insurance. In ON, you will pay PST on the premium at closing. This amount will depend on the size of your down payment
Pre-Paid Expenses: Varies. These are expenses that the builder has paid and you need to re-imburse for the time that you own the home
House Insurance: While not actually a closing cost, you will need to arrange house insurance and provide proof to your lawyer at closing if you are getting a mortgage
Also remember that almost all of these fees are subject to HST.
Jan 30th, 2020 11:19 am
None can be rolled into the mortgage, as your mortgage is qualified based on its Loan to Value of the house. Rolling these into your mortgage would change the Loan to Value. Don't know what levies you mention as I am not aware of any for Ottawa.
Jan 30th, 2020 11:33 am
Upgrades are added to the total price of the home, correct? If that's the case, then I should be fine as long as I'm approved for a mortgage of that amount. With that said, I don't think I'm going to spend anything on upgrades unless I see something that's a necessity.skeet50 wrote: ↑ None can be rolled into the mortgage, as your mortgage is qualified based on its Loan to Value of the house. Rolling these into your mortgage would change the Loan to Value. Don't know what levies you mention as I am not aware of any for Ottawa.
Edit to add: Also remember that you may need money for your upgrades on a pre-construction. Different builders have different policies with regards to upgrades, but most require a deposit on the upgrades at the time of selection with the remaining balance added to your final cost.
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100% of the cost of upgrades are rarely added to the total price of your home as most builders will require a deposit on the upgrades when you select them. The percentage amount of the deposit can vary from builder to builder. Some want 10%, others 50%. Make sure to ask before signing your purchase agreement as upgrades can significantly increase the total cost of the home.