If you are making a home purchase, chances are you need a mortgage. With a mortgage, you are able to make real estate purchases without paying the entire purchase price upfront. You repay the amount plus interest over a set number of years. To ensure you get a good mortgage deal, it is important to understand the various fees and charges you might be required to pay when you get a mortgage in Ontario.
Unfortunately, very few people are aware of all the costs involved. Most people only consider mortgage interest rates or fees – taking nothing else into account – which is wrong. When comparing mortgage products, you need to consider the overall cost of the mortgage and not just the interest rate. The rule of thumb is to allow at least 1.5% of the purchase price for closing costs although consider 2% to be on the safe side.
The following are some of the costs you should expect to pay when taking out a mortgage product:
- Legal Fee and Disbursements
- Land Transfer Tax
- Mortgage Insurance
- Property Tax and Prepaid Utilities Adjustments
- Property Appraisal
- Home Inspection
- Interest Adjustment (IA)
Talk to your Ontario mortgage broker at Richmond Lending today to find out more information about the above mortgage related costs.