Calgary, Remember the mortgage closing costs

Mortgage closing costs Calgarians might be expected to pay

You have spent months saving for a down payment, arranging all you finances, find the perfect home and now the day has come to sign the mortgage documents at the lawyers. These are some extra costs that may be coming.

Land transfer tax – In Calgary and anywhere else in Alberta we don’t have to pay land transfer taxes. Only select provinces in Canada do, and even people in Toronto will have to start paying this extra expense starting in January 2008.

Legal fees – These fees are unavoidable and will run you anywhere from $800 to $1,300 generally depending on what type of real-estate transaction you are doing.

Title insurance – Because of all the Real-estate investing occurring in Calgary and in Alberta the land titles office has a hard time keeping up. Title insurance speeds up the process of your name being transferred on to title (ownership) of the new property. This insurance will run you about $250.

Fire Insurance – This type of insurance is required on all most all real-estate transactions. Most lending institutions require too see the proof of fire insurance on your new property before you sign at the lawyers.

Application Fee – I’m glad to say that this fee no longer exists for most Banks and Lenders. These fees may apply to those who are obtaining bridge financing and private money.

Insurance premiums – Anything over 80% loan to value generally has to be insured by CMHC, Genworth, AIG, or the individual Lending institution. Historically these premiums were to be paid upfront but now are usually just tacked on to your mortgage amount. You could potentially pay these as closing costs but usually clients prefer not to. These premiums could run you from .5% to 7% of your total amount being borrowed. These fees depend dramatically on the loan to value and the property use of the mortgage. Any Mortgage needing insurance is considered a high risk mortgage.

Broker fee – Most Calgary Mortgage professionals never charge a fee for preparing a mortgage for you. If they have to look for private money they could choose to charge you but in Alberta they legally have to disclose any fees upfront.

Appraisal fee – Some Lending institutions require you to pay for an appraisal before the will fund your mortgage to secure there is value in your home. Do not order one before you talk to a Mortgage consultant. Some lenders pay for the cost and others are very selective of which appraiser you use. An appraisal will cost you around $300.

Inspection fee/ Surveys – Not common anymore but can be a requirement of the banks. Talk to your Mortgage consultant to see if necessary.

Reimbursements – You need to repay the seller of any payments he has made you your behalf. Expenses may include municipal, school taxes, or even pre-paid bills. These you would be paying anyways for living in the area. These reimbursements are paid at the lawyers.

Don’t forget the GST – GST is charged on any professional fees. There is no GST on the actual mortgage.

These extra costs may be unexpected and always unwelcome but they are a cost of doing business. Before you let these extra costs scare you away, just ask your mortgage consultant to inform you if any of these extra fees apply. By Law any broker in Calgary has to make you aware of any known and associated fees with the mortgage.