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Wednesday, December 13, 2017

Documents and Proof Required to Close a Home Purchase

Posted by Bill on

Proof that you are who you say you are:
♦ Two pieces of picture I.D.: Birth Certificate, Citizenship, Passport, et cetera
♦ Lawyer name address and contact info including Fax & E-mail.

Proof of income:
♦ Proof of income can be Pay Stubs, Tax Assessments, Tax Returns, Letter from employer with employer’s contact information.

Self-employed proof of Income:
♦ 3 past years Tax & Assessments.
♦ Self-declared income by way of a letter stating your gross income.

Closing costs:
♦ Ensure you have added all closing costs.
♦ Appraisal will need to be paid before funding is advanced and it is the responsibility of the buyer, average cost $300.00. Appraisal will not be released until the fee is paid. Appraisal may be waived if mortgage is CMHC insured.
♦ Home Inspection – average $300.00 to $500.00. Usually paid up front by the buyer.
♦ Lawyer fees for Independent Legal Advice (ILA) average cost $150.00. This lawyer represents you. This may  be taken from the mortgage if it was pre-calculated. Don’t leave yourself short if you have not requested it in the mortgage.
♦ Lawyer fees for closing. Can be $1000.00 to $1500.00 if there are no complications. Remember the lender chooses the lawyer and although you pay for it the lawyer represents the LENDER.
♦ Lender fee. There is often a lender fee especially with Trust Companies.
♦ Broker fee. The Broker will disclose in writing both the lender’s and the broker’s fee. Often these two fees are added to the mortgage, not a good idea especially if you can afford to pay them separately.
♦ Land transfer Tax.

Insurance.
♦ There are two different types of insurance required.
♦ CMHC, GenWorth, or In-House Insurance based on lender and current rates, 1% to 3.5% on average of the full amount of the mortgage.  This insures the lender in the event you default on your payments. All financial institutions require this if Loan to value ratio is over 75%.  Some require it  when LTV is below 75% but may pick up part of all of the cost.
♦ Life and Disability insurance is the other. This insures those on the Mortgage in the event one partner dies or becomes disabled.  The mortgage is paid off for the benefit of the survivor. Some disability insurances pay off the mortgage while others only pay the payments for a limited time only so make sure you read the fine print.

Documents:
♦ Copy of Purchase Agreement.
♦ Copy of Listing.


disclaimer: The contents of this post is based on circumstances current at the time of the post and are intended for general knowledge. For more specific answers to your questions about your own circumstances use our contact form or post a comment below. NOTE: For a FREE, confidential analysis of your situation click here.

Comments

One Response to “Documents and Proof Required to Close a Home Purchase”
  1. Great advice Bill. Not enough people realize there are a lot of smaller costs.

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