"Most people never run far enough on their first wind to
find out they've got a second. Give your dreams all you've
got and you'll be amazed at the energy that comes out of you."
William James
Psychologist and Author, 1842-1910
MORTGAGE PREMIUM
Depending on your down payment you will be required to pay an insurance premium to CMHC or Genworth Capital (which guarantees repayment of the mortgage loan to the bank in the event of your default to repay). The premium is a percentage of the total loan and is based on a 25 year mortgage.
For example:
95% | mortgage the premium is 2.75% of basic mortgage loan |
90% | mortgage the premium is 2.00% of basic mortgage loan |
85% | mortgage the premium is 1.75% of basic mortgage loan |
Sales Tax on Premium:
APPRAISAL
Prior to a lending institution approving your mortgage loan, an appraisal of the property will be required in order to determine the value of the property. The final mortgage loan will be based upon the purchase price or the appraised value, whichever, is lower. If you do not take the mortgage you will be charged.
Mortgage Appraisal Fees: $295 -$500
H.B.P or R.A.P.
Home Buyer's Program (HBP) or Régime d'accession à la propriété (R.A.P.) allows you to withdraw up to $25,000 from your RRSP upon the purchase of a home. If two individuals are purchasing a property whereby both their names appear on the Deed of Sale, each may withdraw $25,000 for a total of $50,000. You are not required to use these monies as part of your down payment; you are only required to purchase a property. You may purchase a property with 100% financing and keep the money you withdrew from your RRSP to renovate, purchase appliances, purchase a car, take a holiday or re-invest the money into another property. You must repay your RRSP loan at the rate of 1/15th of the amount withdrawn each year, starting the 3rd year to the 17th year.
DEPOSIT WITH OFFER
It is called "Good Faith Deposit". In Quebec you do not need to have a deposit with your offer, yet it does show the homeowner that your offer is serious. After the offer has been accepted you will need to certify the cheque. Deposits are from $2,000 and up. A deposit greater than $5,000 may earn interest for you until the signing of the Deed of Sale.
BUILDING INSPECTION
We strongly suggest your offer includes a condition of having the property you are purchasing inspected by a building inspector within 5-7 days of acceptance of the offer. Make sure you use a building inspector who is qualified and covered by responsibility insurance.
A building inspector will explain how things function in the house, suggest how to make simple changes to the house that could improve the value or prevent further deterioration of an important structural element of the property. A building inspector will also point out items that should be corrected in the future (within 2-3 years) or should be corrected immediately. You should recognize that a building inspector is similar to a General Practitioner. When your GP finds something wrong with you, he will recommend you see a specialist. Only make a final decision, as to whether you want to cancel the sale or renegotiate the price, after having obtained an opinion from the specialist.
For example: You noticed that the roof looked a bit tired and knew that you will need to change the roof. The building inspector tells you the same thing yet he goes up into the attic and notices that the roof had leaked in a few places and that the insulation was wet and moldy and that the plywood sheeting was rotten. This you did not anticipate. A roofing specialist will give you a proper estimate of the cost to replace the insulation and the plywood. Armed with this estimate, you can request that the vendor reduce the purchase price accordingly.
Cost: $450 - $650
CERTIFICATE OF LOCATION
A certificate of location is a 4 or 5 page document detailing the property and building dimensions, and showing the footprint of the home on the lot, as well as, anything attached to it.
It is always a condition of your mortgage lender to request a new certificate of location and make sure the property respects the by-laws of the municipality regarding building codes, etc. If the new certificate reveals no major changes made to certificate of location, the surveying cost will be borne by you.
Cost: $650
MUNICIPAL PROPERTY TAXES
Municipal taxes are paid in two installments on January 1st and on June 1st . The amount payable will be half of the yearly municipal taxes.
SCHOOL PROPERTY TAXES
School taxes are paid in one installment on July 1st.
ADJUSTMENT AT SIGNING
The homeowner prepays the property and school taxes and depending on when you take possession of your home, the notary will make an adjustment in favour of the homeowner in an amount equal to the prepaid taxes.
ADMINISTRATION OF TAXES
Your mortgage lender may request that you submit 1/12 of the annual property taxes along with your monthly mortgage payment. When a tax bill is sent to you, forward the invoice to your mortgage lender and they will make the payment on your behalf from the tax account they will have set-up for you.
Note: The mortgage lender will require that you prepay the first installment of taxes due. For example: If you purchase your home on May 30th, the mortgage lender will require that you pay the 2nd installment of property taxes due on June 1st, and the full payment of the school taxes due on July 1st. They will then administrate payment of your annual taxes after that point from the monies you have set aside in your tax account.
OIL HEATING
The homeowner will fill up the oil tank a few days before the signing date and bring a receipt that this was done. You will then pay for a full tank of oil at the price indicated on the fill-up receipt. A normal oil tank holds 909 litres.(Cost will depend on current market oil prices)
Cost: based on cost per litre plus GST + PST
NOTARY FEES
Make sure you work with a notary who is familiar with the local by-laws.
Notary basic fees: | $800 - $900 |
Taxes - 13.95% sales taxes: | $112 to 126 |
Registration of Deed of Sale and mortgage: | $300 |
PROPERTY TRANSFER TAX LEVIES
Municipalities have the right to levy a transfer tax (jokingly referred to as the "Welcome Tax:) on every property purchased.
The tax is calculated on the highest of: Price paid or City Evaluation
| $5 per thousand on first | $50,000 of the price | = $250 |
| $10 per thousand of the next | $200,000 of the price | = |
| $20 per thousand over | $500,000 of the price | = |
HOUSE INSURANCE
At the signing you must bring proof that you have insured your home for its value. Please know that it is best to shop around. Not all insurance companies charge the same.
BALANCE OF DOWN PAYMENT IS REQUIRED AT THE SIGNING.
When my sign is on your lawn.... You're moving!
Call Christine Mc Dowell, (514) 755-2442