Before You Offer, Count the Closing Costs Too

When I sit down with a buyer, we count two piles of money, not one. The down payment is the first. The second is the closing costs, and we confirm early that roughly 1.5 percent of the price is set aside for them. On a $360,000 home, that is about $5,400. Nobody should hear about that money for the first time in closing week.

The 1.5 percent covers the lawyer's side of closing. The legal fee to your lawyer. The registration fees: Newfoundland and Labrador has no land transfer tax, so instead the Registry of Deeds charges $100 plus $0.40 for every $100 of value, once on the price for the deed and again on the mortgage amount, about $3,000 for both on this purchase. And title insurance, which your lawyer arranges and charges on the same bill.

One more thing can show up on closing day: money you may owe the sellers for things they have already paid for. If they prepaid the property taxes for the year, you pay them back for the months after closing, when the home is yours. If the house heats with oil or propane, you pay them for the fuel left in the tank. Lawyers call these adjustments. All it really means is settling up fairly for costs that cross over closing day, and it is easier when it is in the plan from the start.

Count it before you offer, not after. A winning offer is only a win if you can close it comfortably.

Want to run your own numbers? Try my Closing Cost Estimator: https://brokrbuilt.ca/closing-cost-estimator/sPvPqYj6dXRq0jYeR2tZuYxBJkv9DRgc

Always in kindness, Tonia | The Mortgage Missus Inc.