Every time we buy a property in Ontario, there are certain expenses that we must cover at the time of closing of the transaction.   Most of the time we do not understand where these expenses are being generated or why we should pay more than the money stipulated for the initial housing.   In summary, the closing costs are all those involved in the processing of the mortgage loan, the legal transfer of the property to the buyer and the fees of lawyers and other professionals who are working for us.   In Ontario, closing costs are usually as follows:  

1. Legal expenses: $ 990 + HST for a conventional transfer and mortgage transaction.
2. Disbursements: cost paid by the lawyer to third parties, includes tax certificate, zoning reports, searches (titles, executions, utilities, etc.), messengers, bank charges, among others. They usually range between $ 300 and $ 600.
3. Land transfer tax: this expense will depend on the cost of the property. In the case of homes located outside of Toronto, buyers should only pay the Provincial Land Transfer Tax. If the property is inside Toronto, you must add this Municipal tax. To get an estimate of how much you must pay for this tax, visit the mortgage calculator.
4. Title insurance: a single payment that will depend on the price and type of the property, the mortgage to be registered and the amount of initial previously paid. For example: - Condo - $ 400,000 - 20% downpayment = $ 204.12 - Condo - $ 700,000 - 20% downpayment = $ 420.12 - Freehold - $ 850,000 - 20% downpayment = $ 783 - Freehold - $ 1,300,000 - 20% downpayment = $ 1,269
5. Registration fees: applies only to purchases. In a regular transaction, there are two instruments that must be registered: a transfer and a charge. Legal powers, second mortgage, lease, judgments and means of transportation could also be registered. If the property is located in Toronto, an additional administrative expense of $ 75 + HST must be covered.
6. Provincial sales tax: 8% that is calculated on the amount of the Insurance Premium. Said insurance applies only to those who are buying with less than 20% initial, since the bank must have money guarantee remaining between what the buyer is paying and the 20% required.
7. Condominium fees: if it is a property in a condominium, and if the owner has already paid months in advance, the buyer must pay this prorated amount to the seller.
8. Property taxes: Like the previous expense, a proration must be calculated between what the owner has previously paid and what would correspond to the new buyer. That is, if the original owner paid the property tax for the whole year and since the City will not return this amount, the buyer must pay the difference depending on the date the transaction is closing.

  It is very important that we have enough money to cover these expenses, since it is not just a 5% or 20% initial fee. Without these expenses, we could not close the deal and purchase the property.   If you still have doubts about closing costs, what you should cover and what not, contact me and I will gladly advise you.