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 Contract of Purchase and Sale.
The Contract of Purchase and Sale is a legal document the buyer and seller approve detailing the price & terms of the transaction.
When negotiating the cost of the home 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.
Considering insurance on your mortgage
Talk to your mortgage professional about 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 (usually 5 to 10%)
Down Payment
A partial payment made at the time of purchase. First-time home buyers are allowed to put as little as 5% 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 buyer. Building inspectors in British Columbia are required to be licensed by the Business Practices and Consumer Protection Authority (BPCPA).
Property Transfer Tax (PTT in British Columbia)
A tax paid on property that changes hands. First time buyers may be eligible for a rebate.
Goods and Services Tax
A tax paid on newly constructed property that is purchased. First time buyers may be eligible for a rebate.
Legal Fees
The cost paid to have a lawyer or notary finalize the property transfer between the seller and the buyer.
Mortgage Loan Insurance
Mortgage loan insurance enables home buyers to purchase a home with as little as zero down payment. The amount of the insurance premium depends on the amount borrowed from the lender.
Title Insurance (optional)
Title Insurance provides the buyer with coverage against title risks inherent in real estate transactions (including title fraud) for as long as you own your home.
What is a Mortgage
Terms and Rates
Mortgage Types
Closing Terms and Costs
Paying Off Your Mortgage Sooner
Types of Homes
Finalizing Your Mortgage
(source: Canadian Association of Accredited Mortgage Professionals) |
