How much are closing costs?
Closing costs, including all fees and taxes, are an estimated 13-15% on top of the purchase price. Please be aware that if you are obtaining a Greek Mortgage, the mortgage arrangement fees are on top of the 13-15% previously mentioned. Mortgage arrangement fees average 1.6% of the purchase price. These are the only closing costs that can be incorporated into the loan.
The rest of the closing costs, excluding the transfer taxes, vary from 3% to 5% of the appraised tax value. These percentages are applied to whichever is greatest of: 1) the sale price of the property, 2) the official tax appraisal value, or 3) the value determined by property assessment authorities.
Closing costs will vary based on several factors including the lender, the type of mortgage, the purchase contract, and the state you live in. Your lender will charge fees for appraisal and credit reports. If you are paying for points those will also be charged at closing. There are also fees for title insurance and hazard insurance and deposits for an escrow account. A lender can give you the approximate closing costs of your mortgage with a quote so that you can compare lenders.
A. Rule of thumb estimate: Often people forget to budget for closing costs. Use 2% of the purchase price. That would work out to $6000 on a $300,000 purchase price. Costs to Expect: Land Transfer Tax Provincial : All buyers of property pay this once and new homes are exempt from this. Budget between 1.5 to 2.0 % of the purchase price. Land Transfer Tax City of Toronto : Toronto City Council approved a municipal land transfer tax that will be levied on top of the provincial land transfer tax as of February 2008, this is in addition to the Provincial Land Transfer Tax, budget another 1.5 to 2.0 % of the purchase price. Legal Fees: Your lawyer will charge you on the closing date for registering the mortgage and for acting on the purchase. The fees can often be misunderstood so it’s important to ask for the total costs including the disbursements. Budget approx. $1000 – $1500 Home Inspection and Appraisal: These are fees to make sure the house is in fine mechanical and physical condition.
Closing costs range in amount based on whether the home is on land and requires all the costs of land closings (i.e. title search, title insurance, recording fees, attorney costs) or is in a park and requires only nominal fees (although some states consider mobile homes in park just like real estate) for things like flood search, documentation fee and recording fees. Closing costs can be financed when you refinance if you have sufficient equity in your home. The most accurate way to determine closing costs is to contact your Regional Manager.
