Getting a good interest rate on your mortgage is half the battle
won, but you should also look at closing and other costs that you have to bear as
part of the mortgage deal. According to a Financial
Post report, these costs could have a significant impact on how good a
mortgage deal is for you.
If you are buying a home in Toronto, then you have to bear
in mind that a land transfer tax is charged. However, a rebate is also offered
for first-time home buyers i.e. someone who has never owned a house in any
location across the world and whose spouse has also not owned a home previously.
If you fit these criteria, then you qualify for a rebate of $2,000 from the
Ontario government. A $3,725 tax rebate is also provided for first-time home
purchasers in Toronto.
These exemptions should lower the closing costs for first time buyers, says mortgage broker Cara
Savege.
Legal costs apart, you will also have to pay title insurance
costs and appraisal fee. Title insurance must be bought if the property has not
been surveyed in the last few years. This can cost about $250 for a condominium
and $500 for a detached house. Mortgage insurance will be required for mortgage
down payments under 20%. Besides these costs, property taxes, condominium fees
and other utility costs must also be accounted for.
Ms. Savege says that for many borrowers, one way to pay for
all these costs is to make a smaller downpayment and use this remaining amount
to pay towards other mortgage costs.
