As a first time homebuyer, you may be unaware of the additional costs that are expected at closing. Unfortunately, an Abbotsford mortgage is more than just the monthly payments you make towards your home. Our team here at Your Mortgage Source (YMS), can confidently guide and inform you of the relative costs, so you can financially plan and not be blindsided by what is owed.
Common Closing Costs
Appraisal Fee: This is charged by your lender to ensure the appropriate estimation of your future home’s value. This lets the lender know what your house’s resale value is worth, so they can accurately calculate how much they can lend you.
Mortgage Application Fee: This fee is sometimes charged by lenders or bankers for processing your home loan application. It is more common, however, to be charged an application fee when your down payment is less than 20%.
Home Inspection: A home inspection is not mandatory but highly recommended so the buyer knows how good of a condition the home is in. Your potential home could have a few problems that are not physically visible, therefore a home inspection is suggested.
Legal Fees: These fees are for when you choose to work with a real estate lawyer. They will prepare and organise all your financial documentation.
Title Insurance: If there is a property ownership disagreement, then title insurance can protect against any financial loss. Title insurance might be required by your lender to see if there are any underlying issues in the home such as, taxes or unpaid expenses that could affect the new owners.
Mortgage broker fee: Your mortgage broker in Abbotsford may charge you a commission for around 1-2% of your home’s price.
Land Transfer Tax: Regardless of what province you live in, a land transfer tax is charged as a percentage of your new home’s price.
Down Payment: At closing, you will be required to make a down payment towards your home’s purchase price. Paying at least 20% of your home’s price is recommended or else you will need to obtain mortgage default insurance.
Mortgage Default Insurance: If you pay between 5% and 19.9% of your home’s down payment then you will be required to get mortgage default insurance. This protects the lender in case you were to default on your payments.
The costs listed above are some of the fees you may have to pay at your home’s closing. For more information on types of mortgage costs, please contact your British Columbia mortgage broker at 604.556.3893. Our team at Your Mortgage Source is eager to work with you and help make your home dreams come true.