Count the deposit as part of the down payment
A deposit already paid forms part of the down payment. Deduct it when calculating the down-payment funds still needed at closing; do not add it to the full down payment again.
Closing expenses also need to be budgeted. Some are paid before closing or separately from the money your lawyer requests. Recording their timing helps avoid counting the same expense twice.
Allow for land transfer taxes and transaction costs
An Ontario purchase may involve provincial land transfer tax. A property in the City of Toronto may also involve municipal land transfer tax. Any relief needs assessment under the applicable eligibility rules rather than an assumption based only on first-time-buyer status.
An estimate should separate tax before relief, any relief assumed and the amount remaining. Legal and other professional-cost allowances need to be identified as estimates, not fee quotes or statutory charges.
Keep monthly ownership costs separate
A mortgage payment estimate usually covers principal and interest. Property taxes, insurance and other ownership expenses still belong in the monthly budget, even if they are not part of that payment.
Review both the funds needed to complete the purchase and what you would pay afterwards. Neither an estimated payment nor a closing budget establishes mortgage qualification.
Confirm the actual mortgage and closing funds
Streetwise can discuss the home-financing assessment. Actual transaction costs and the funds needed for closing require confirmation for the purchase, rather than reliance on a general estimate.
Read about home financing or contact Streetwise about your purchase.
