There are various costs associated with the purchase of your new home whether it be in Nanaimo or elswhere. After you've arrived at the price range of the home for sale that you can afford and the home's mortgage you've qualified for, remember to add on the up front costs.
Mortgage Loan Insurance Application Fee / Premium:
If you have a high ratio mortgage (less than a 25% down payment) you may require mortgage loan insurance. To obtain this insurance you may be asked to pay an application fee which may be: a) added to your mortgage or, b) paid in full upon closing.
Appraisal Fee
The mortgage lender may require that your new home be appraised - at your expense. An appraisal is an estimate of the home's value. This cost could be in the $300.00 - $400.00 range.
Deposit
This will eventually make up part of your down payment and must be made when your Offer to Purchase is submitted. The amount varies from area to area, but 5% of the purchase price is not unheard of.
Down Payment
Traditionally your home purchase requires a minimum of 5% for a high ratio mortgage and 25% for a conventional mortgage. Today some lenders have modified their policies so as to enable those with good credit to qualify for mortgages with no money down.
Home Inspection Fee
Your Realtor often will include a home inspection condition in your Offer to Purchase. This report covers the condition of the home and could cost in the $300.00 to $400.00 range. It should be noted that care should be given when selecting a home inspector, ensuring that a reputable company with solid credentials be selected.
Land Registration Fees ( sometimes called a Land Transfer Tax, Deed Registration Fee, Tariff or Property Tax)
These provincial or municipal charges will have to be paid upon closing in some provinces. This cost is based on the purchase price of the home. Check with your lawyer or notary to see what the rates are in your area. In British Columbia, the amount is 1% of the first $200,000.00 and 2% on the balance.
Pre Paid Property Taxes / Utility Bills
You will have to reimburse the Seller for things like property taxes already paid, or filling the oil tank, etc.
Property Insurance
Your mortgage lender will require insurance because your new home will be the security held for the mortgage. This insurance covers the replacement costs of the structure of your home and may include your contents as well. Insurance must be in place on the day of closing. Your Realtor may wish to include a condition in your Offer to Purchase that your new house qualifies for insurance because, believe it or not, not every house in today's market qualifies.
Survey or Certificate of Location Cost
Your mortgage lender may require an up to date survey or certificate of location before finalizing the loan. If the Seller doesn't have one, or agree to provide one, you may very well have to pay in the $1000. to $2000. range. In Nanaimo, Title Insurance may be used in lieu of.
Water Quality Inspection
If your new home has a well you'll want to test the quality of the water, ensuring the supply is adequate and the water is potable. You can always negotiate these costs with the Seller in your Offer to Purchase.
Legal Fees and Disbursements
These fees must be paid upon closing and generally cost $500 -$1000.
Title Insurance
Your lawyer or lender may suggest title insurance to cover any loss caused by defects in the title to the property. In Nanaimo, the cost will range between $200. - $300.
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