Closing On Your Home Purchase

Posted by Nick Niesen on October 29th, 2010

This is the final step. You've found the perfect house. You're happy with your mortgage arrangements. Now it's time to close the deal. Closing is a process where all legal and financial obligations, which were stated in your "Offer of Purchase", have all been made.

There are many things to keep in mind for the closing to go smoothly. Here are the steps:

? Give a copy of your purchase offer to your lawyer and have him or her go over the terms and conditions.
? Meet all the conditions of the offer by a specified date.
? A land survey is completed.
? Complete all the various inspections including a home inspection.
? Have your lawyer carry out title searches.
? Your lawyer will check into taxes and liens.
? Make sure you have made all the necessary payments, including a deposit.
? Check to make sure all property taxes are up to date (lawyer).
? Finalize all your mortgage paperwork (lawyer).
? Arrange for utilities to be connected to your new home.
? Confirm the purchase price, the balance of the deposit and any other adjustments by having your lawyer prepare a statement of adjustment.
? Once all of the above are complete, you need to sign a cheque and pay all remaining legal fees.

Closing Day

This is the day you take possession of our new home and you get your keys. But much more happens on Closing Day.

? Your lender provides the mortgage money to your lawyer.
? You provide the balance of the purchase price to your lawyer.
? You pay all legal fees, disbursements, and land transfer taxes.

Closing Day Defined

Adjustments and Closing Costs

In order to register a deed, you have to pay Registry Office fees and the Land Transfer Taxes.

Land Transfer Taxes

A land transfer tax is usually paid to the province at the time you or your lawyer register your transfer and deed. This tax is calculated as a percentage of the purchase price. If you are a first time home buyer of a new home, you are given a bit of a break.

Right of Inspection

Usually, the vendor is not required to allow you to inspect the premises prior to closing. However, sometimes this can be worked out between you and the vendor and it is recommended that you do inspect the premises if possible.

Decide on your mortgage lender with the same care you would bring in a business partner. When times get tough and you need a a lender to stick through tough times with you,you will quickly find out if they are someone you would want in a foxhole with you.

The last thing you want is a lender who is more concerned about percentages than in your historical payment performance.

Build a relationship with your lender and keep them informed as if you are put in to a position to change the structure of your mortgage. Having a lender as a business partner can be a significant advantage in tough times.