Step 23 to Buying A Home: Transfer Your Closing Costs

Once your lawyer instructed you on how to transfer the remainder of the down payment and closing costs, then you just have to wait for the closing day. Usually this is done before the signing is scheduled but if the seller’s lawyer has not prepared the documents prior to signing appointment then this has to be done right after.
Your closing costs include all the remaining down payment, land transfer taxes (Toronto has a municipal land transfer tax added to the Provincial Land Transfer Tax, seller adjustments (these are the money that the seller has to pay in order to sell the house and sometimes they have to pay more than what they should have), GST (8% of the mortgage default insurance (CMHC, Sagen, Canada Guaranty), legal and discbursement fees, registration fee, etc. The lawyer will send you the Trust Ledger that itemize all the expenses and costs. This is the fee that you need to transfer to the lawyer’s account before the closing can happen.

If your closing date falls past June, sometimes the seller has to pay for the full year of property taxes or if the condo fee has been pre-paid or any other equipment rental that comes with the bank has been paid by the seller in advance. These amount will be credited back to the seller at the time of closing up to the last day that they are in the house. We always advise that the buyer save more than the recommended closing costs of 1.5% of the purchase price for resale homes and up to 7% for pre-construction homes to be on the safe side.