Home closing is the final step of the home buying process. If you're thinking about purchasing a home, or if you're in the middle of buying a home, you should know about home closing. Knowing what's coming, how much money you can expect to spend at closing and what you can do to save money at close can help you have a good home buying experience. Here's what you need to know.
What Is Home Closing?
After going through inspections, negotiations and all the legal and administrative motions that must happen in order to buy a home, home closing is the final step of the home purchase. Closing is when ownership transfers from the seller to the buyer. Home closing is also when various legal and administrative fees are paid to the people who have been helping with the home purchase along the way.
What Happens During Home Closing?
Home closing occurs when the buyer gives their down payment and payment for closing costs to their lawyer or notary. At the same time, the mortgage lender gives payment for the mortgage to the lawyer or notary. Then, the lawyer (or notary) gives that payment to the home seller.
What Costs Must Be Paid at Home Closing?
The type of fees that must be paid at closing varies by sale and by location. Typically, buyers will have to pay:
- Real estate lawyer. Legal fees for the home sale are usually around $500.
- Land transfer tax. This is typically a percentage of the purchase price.
- Title insurance. This protects the lender in the event that a dispute over ownership should arise.
- Provincial sales tax on the mortgage default insurance. This amount varies by province.
In addition to the closing costs, the home buyer must also pay the rest of their down payment, less the deposit. The down payment is generally 5% for the first $500,000, and 10% for everything over $500,000.
In addition, the home buyer may also need to pay costs throughout the home purchase process. The home inspection and home appraisal, for example, are both costs that are generally incurred before home closing.
The city center Clagary new home buyer must be prepared to pay all of these costs unless the home purchase contract specifies that some of these costs must be paid by the seller. Home buyers who would like the seller to pay their closing costs must talk to their real estate professional to find out more about how this can happen.
What Can You Do to Prepare for Home Closing?
In order to prepare for home closing, the seller must have all of their finances in order. Their savings must be enough to cover the cost of the down payment, closing costs, the fees due throughout the home purchase process, and the relocation itself. It's important to work with a knowledgeable lender and real estate professional to avoid surprise costs midway through the process.
Work With a Qualified Real Estate Professional
Your real estate professional can answer your questions, so that you'll be ready when the time comes to buy a home. If you're thinking about buying a home in the next few months, contact a real estate professional to find out more about getting started.