So, you’ve found your dream home. Great. You’re probably imagining where the couch will go, which wall will hold the TV, and what colour to paint the kitchen. But, before you get too comfy in those daydreams, let’s talk about closing costs. The price of the house? Sure, that’s front and center. But those additional fees that sneak in at the eleventh hour when you’re actually buying the place? They can catch you off guard if you’re not prepared.

What Are Closing Costs Anyway?

Closing costs. Sounds simple, but what does it really mean? Basically, it’s everything you have to pay to actually close the deal — beyond the house price and down payment. And trust me, you don’t want to find yourself caught off guard by these costs after you’ve already signed everything. It’s those extra bills like:

• Land Transfer Tax
• Legal Fees
• Home Insurance

These guys all come up at the end, and while they may look like small things at first, they can pile up fast.

Land Transfer Tax: That Pesky Extra Cost

Alright, let’s get into land transfer tax first. This one hits hard. It’s a tax, yes, but it’s not just any tax. It’s calculated on the price of the home. Buying in Toronto? Well, now you’re dealing with both provincial and municipal land transfer taxes. That’s a double whammy.

For those first-time buyers, though, there’s a bit of a light at the end of the tunnel. Land transfer tax rebates can seriously reduce your costs — but you need to make sure you qualify and apply for it.

Legal Fees: The Lawyer You’ll Need

Alright, let’s get into land transfer tax first. This one hits hard. It’s a tax, yes, but not just any tax — it’s calculated based on the price of the home, and that can add up fast. Buying in Toronto? Buckle up, because you’re not just paying the provincial land transfer tax — you’re also on the hook for a municipal land transfer tax. That means double the cost and double the headache.

Now, before you start sweating, there’s a bit of good news. If you’re a first-time homebuyer, you might be eligible for a land transfer tax rebate. This rebate can knock thousands off your closing costs. But — and this is a big one — you’ve got to meet the criteria and actually apply for it. It’s not automatic. So don’t leave this step to the last minute or assume your lawyer will handle it without asking. Do your homework early, check your eligibility, and factor that rebate into your closing budget if it applies to you.

Home Insurance: Can’t Skip It

While home insurance doesn’t technically fall under “closing costs,” it’s a must-have. Most lenders won’t hand over the keys unless you’ve got proof of insurance to protect your new home. You might think it’s just another thing to worry about, but trust me — you’ll want to make sure you’re covered. Shop around for a policy that works for you; costs can vary depending on your home’s value and how much coverage you need.

Other Costs: The Stuff You Might Forget

Okay, here’s where the little things can sneak up on you. Sure, you know about the taxes, legal fees, and insurance, but have you thought about:

• Home Inspection Fees: If you’re opting for a home inspection, that’s going to cost you. It’s worth it, though, just to be sure the house isn’t hiding something.
• Appraisal Fees: Lenders like to know the house is worth what you’re paying. They might require an appraisal, which means another fee.
• Moving Costs: You’ve got to move your stuff, right? Whether you’re hiring movers or renting a truck, that’s another cost to consider.
• Utility Setup Fees: Setting up things like water, electricity, and gas will likely involve a fee. It’s a small thing, but it adds up.

How Much Should You Set Aside for Closing Costs?

Alright, so how much should you expect to pay in closing costs? Well, in Ontario, it generally ranges from 1.5% to 4% of the home’s purchase price. So, if you’re buying a home for $500,000, you could be looking at anywhere from $7,500 to $20,000 in additional costs.

It’s best to budget this on top of your down payment. That way, when the time comes, you won’t find yourself scrambling at the last minute to come up with the extra cash.

Plan for Closing Costs

Here’s the thing — closing costs might feel like the fine print of buying a home, but if you don’t plan for them, they can mess with your whole game. They’re an unavoidable part of the process, and you don’t want them to derail your plans. So, figure out what they might cost and set that money aside before you get to the final stages.

Team King is here to guide you through all of this. So don’t hesitate to reach out — we’ve got your back from start to finish. Reach out to Team King today at (705) 988-1022, email us at teamkingremaxcrown@gmail.com or click here to get in touch online.