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Monday, December 26, 2022   /   by Ameil Gill



When purchasing a home, everyone knows you need a down payment, but many people don’t realize that in addition to your down payment, more funds are needed to cover your closing costs. Closing costs are fees that can include title insurance, tax and utility reimbursements, transfer tax, conveyancing fees, and miscellaneous smaller fees for services like notaries and wire transfers. If you are getting a mortgage, your lender could also require funds to be held in escrow for taxes and insurance, and charge underwriting and application fees. This may all sound like real-estate slang, so let me break it down for you…

How much should you budget for closing costs? I typically tell my buyers to budget anywhere between 3-4% of the price of the home. Here is a quick breakdown of what you may need to factor into your total out-of-pocket when buying a home:

Appraisal fee: $400-500
Underwriting and application fees: $1000-$2000
Title insurance: 0.5-1% of the purchase price
Transfer tax: 1-2.5% of the loan (this is sometimes split between buyer and seller)
Mortgage insurance: 0.5-1.5% of the loan (if applicable)
Prepaids: typically a full year of your property taxes and homeowners insurance are required upfront)
Any HOA/condo fees or capital contributions

As home prices and interest rates continue to rise, it’s more important than ever to make sure your plan includes budgeting for closing costs. Keep in mind that these fees vary depending on location, loan program, and lender.

If you’re thinking about buying and wondering what your total out-of-pocket cost might be, send me a message I would be happy to put together an estimate for you!

REMAX Realty One Inc. - The Gill Team
Ameil Gill
50 Burnhamthorpe Road West Sussex Centre Ste #102
Mississauga, ON L5B 3C2

Information is provided exclusively for consumers’ personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Data is deemed reliable, but is not guaranteed accurate by the MLS®. Copyright 2024 Last Updated May 24, 2024
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