- Proof of person, photo ID, and social insurance number
- Proof of income, employment letter, recent pay stub, three years tax notice of assessment
- A list of assets and liabilities
- Statement of mortgage(s) on a current home
- Proof of down payment, three months of bank statements, gift letter
- A voided cheque
- Lawyer's information
There are four different categories of home buying expenses outside of the mortgage.
- The down payment: Paid at closing this amount will be whatever you agree to with the lender. There are $0 down and “cash back” options available to those who qualify.
- Closing cost: Paid at closing, these include land transfer tax, legal fees, interest or property tax adjustments, lender fees, and legal disbursements. Lenders typically require you set aside 1.5% of the purchase price of the home to cover these costs.
- Mortgage insurance premiums: Purchases with a down payment less than 25% require mortgage insurance. This insurance cost is added directly to the mortgage amount so there is no immediate payout required.
- Pre-closing expenses: Paid prior to the closing, some of these expenses may apply:
- Appraisal $250 to $450 if required by the lender.
- Home inspection, $300 to $500. Optional, but recommended, so you're aware of any potential problems with your home.
- Deposit money at the time of offer; $100 to $10,000, held in trust and credited toward your down payment at close.
- Other information that may be requested, such as surveys or water samples, etc., may have additional costs associated with them.
Bruce Smith is a consultant with Future Group Mortgages and brings more than 20 years of business enterprise development and funding solutions, through an innovative and effective results driven approach. Bruce holds a Bachelor of Business Management Degree, double majoring in accounting/finance and enterprise development. Future Group Mortgages arranges residential, commercial, and construction mortgages. Contact Bruce at 519.649.2502 ext 3 or bsmith@futuregroup.ca.
Published in Networking Today, February 2007
