Whether or not you are purchasing your first home or have owned a home in the past, you are most likely excited. One of the most commonly asked questions at this time is how much money do I need for closing costs? You need to know if your costs will be affordable for your budget. Your best option is finding a home that fits both your budget and your lifestyle.
You need to take more than just the purchase price of your new home into consideration. There are many additional expenses involved with purchasing a home in Alberta that are just as important. We want you to find a home you can comfortably afford that appeals to your emotions, lifestyle and budget while meeting all of your expectations during this exciting time.
To give you the short answer, typically no. However, you are probably wondering who usually pays closing costs. Although there are certain costs you can typically include in your mortgage payments, we have seen other costs you must pay separately. The costs you have to pay are explained below.
• Your cost is usually between $300 and $500
• You will reimburse the owner for property taxes after your closing date
• Legal fees in Alberta are generally between $500 and $1,500
• Your paperwork must be completed by a lawyer
• Make certain you are aware of all fees because they are different for each lawyer
• Your property insurance costs are typically monthly, or you can choose to pay it yearly in a lump sum, and really vary depending on the type of home you purchase
• You will be required by your mortgage provider to have insurance
• Your insurance is for the cost of replacing your home
• There are a wide range of moving expenses you will need to pay
• You can choose an insured moving company or you can offer your friends money or snacks to help you move
Utility Service Fees:
• We recommend expecting to pay between $35 and $50 for each utility
• You can determine your exact fees by contacting your Alberta utility providers
The Recurring Costs:
• Your recurring costs include insurance, property taxes and homeowner's fees
• These costs are based on how long you own your home for the year
There are certain costs you may be responsible for paying. You may be wondering, can closing costs be included in a mortgage? Some closing costs can, but you may be responsible for the costs detailed below.
• We recommend allowing $300 to $500 for your property appraisal
• If you are purchasing an extremely rural, unique or large home, your cost is higher
• Your mortgage provider may require a recent survey
• Your cost is between $1,000 and $2,000
• If a survey is unavailable through the seller, this expense may be necessary
• We recommend asking if title insurance is acceptable to your lender instead
Home Inspection Fee:
• We recommend a home inspection prior to purchasing your new home
• A home inspection will reveal anything wrong with the home
Estoppel Certificate Fee:
• This fee does not usually exceed $200
• You need this certificate to purchase a strata unit or a condominium in Calgary
• The certificate shows you if outstanding interest is due from the previous owner
• Unpaid condo contributions or interest are also shown
In Alberta, it is the buyer that is covering the closing costs. We have seen other provinces and states where it's more typical that the seller covers some costs, but that isn't the case in Alberta. When you understand all of the costs pertaining to purchasing a home, you will be able to locate the ideal home for your needs, desires and budget.
If you intend to make a downpayment for less than 20 percent of the value of the home, you will be required to ensure your mortgage. You can decide if you prefer to add this cost to your mortgage or if you want to pay the cost in advance.
When purchasing a brand new home, this is a home that has never been lived in by anyone else. You will be responsible for paying the GST or goods and services tax. This amount should be included in your contract cost. You may be entitled to a partial rebate if you intend to use the new home as your primary residence and the value is below $450,000. You can find additional information through a real estate accountant or the official website for Revenue Canada. In Alberta, you are required to have a $2,000 new hone warranty if you intend to build a new home.
You may also qualify for a GST rebate if you are purchasing a home in Alberta for $350,000. Your 36 percent rebate is for five percent of the GST you pay. The rebate was created for properties selling between $350,000 and $450,000. Any property selling for more than $450,000 does not qualify. We want you to know your closing costs will be less in Alberta than anywhere else in Canada.
This is because of the tax reduction in Alberta. When you do not have to pay a land transfer tax or property tax, you will save a lot of money. This will ensure your closing costs are decreased. You will not find this option available anywhere else in Canada.
Every time you purchase or sell a property, you will be responsible for paying the closing costs in Alberta. The specific amount is dependent on the final sale price of the property you intend to purchase in Alberta. We recommend budgeting for between two and four percent of the final sale price of the home to be safe.