Closing Costs: - additional costs of buying a home. - appliances/furnishings. - appraisal fee. - home inspection - property taxes

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1 Closing Costs: - additional costs of buying a home - land transfer tax - legal fees - mortgage application fee - appraisal fee - repairs - utility connection - appliances/furnishings - moving costs - home inspection - property taxes

2 Initial Fees Initial Cost of Home Ownership Inspection Fee Before you make a decision to purchase a home, it is highly recommended you have a professional building inspector inspect the home for any major repairs that may need to be done. Mortgage Application Fee Your financial institution may charge you a fee for processing your mortgage application. Appraisal Fee Your financial institution may charge you a fee for having an appraiser check if the value of your home meets its mortgage requirements. Lawyers Disbursements and Fees Land Transfer Tax - paid to the Manitoba Land Titles Office at the time the title of your home is registered. - is a percentage applied to the following parts of the purchase price. Example 1 Calculate the land transfer tax on a home with a purchase price of $125,000.

3 Jasmine wants to buy a home that costs $ How much is the land transfer tax? Lawyers Disbursements and Fees Survey Certificate You may be able to obtain this document from the seller. If you require a new survey certificate, a surveyor will charge you about $300 for a city or municipal property survey. Additional Legal Costs These include disbursements such as registration costs, zoning memorandum, tax certificate, title searches, administration costs, and GST. Lawyers fees Real estate lawyers will charge you about $300-$400 for the legal work involved in the purchase of your home.

4 Other Expenses: Interest Adjustment If you require a mortgage, the land titles processing time is such that your mortgage money will not be released until after you take possession of your new home. During this time, you must pay mortgage interest to the seller. Property Tax Adjustment unless the property is on the monthly Tax Installment Payment Plan (TIPP) offered by the City of Winnipeg, either the seller or the buyer must pay property tax to the city or municipality once during the calendar year. If you purchase a property after the taxes have already been paid by the original owner, you will have to reimburse the seller for your share. Example 2 Jennifer Jones has just purchased a new home. The possession date is September 1. Annual property taxes are $1878. The due date for property taxes is June 30. Calculate Jennifer s property tax adjustment. Catarina takes possession of her house on October 1st. The property tax of $3980 for the year has been paid for by the vendor. How much must Catarina pay for her share of the property tax on closing date?

5 Insurance Adjustment You also pay property insurance once during the calendar year. If you have the same insurance company, and if the insurance of your new home is not the same as the insurance of your previous home, your insurance company will make an adjustment to the premiums owing. Example 4 The Winters family takes possession of a new home on July 1. They have to increase their home insurance from $400 to $640 per year. The insurance premium is not due until October 1 but the Winters are required to pay for the months of July, August and September. Calculate the insurance premium adjustment. Other additional costs of purchasing a new home are the following: Moving Expenses Service Charges Immediate Repairs Appliances Furniture Decorating Costs

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7 Example Jennifer Jones has just purchased a new home. The possession date is September 1. Annual property taxes are $1878. The due date for property taxes is June 30. Calculate Jennifer s property tax adjustment. If you purchase a property before the taxes are paid, the seller will have to pay you for his or her share of the year s taxes. Example The Jordan family has just purchased a new home. The possession date is March 1. Annual property taxes are $2040. The due date for property taxes is June 30. Calculate the Jordan family s property tax adjustment.