Additional costs when Buying a home, I wanted to share this list provided by TREB that I think you will find useful.

Additional Costs when Buying a home

THIS LIST PROVIDED BY TREB (TORONTO REAL ESTATE BOARD)  IS A VERY USEFUL LIST TO REFER TO AND TO KEEP IN MIND

ADDITIONAL COSTS WHEN BUYING A HOME

The purchase price of your home is only one of the costs you'll encounter. Here are other possible costs you need to consider:

• Mortgage loan insurance:
  If you are putting less than 20 per cent of the house value down, you're going to need mortgage loan insurance. Depending on the lender, the premium can be added to mortgage payments.
   
• Appraisal fee: 
  Lenders typically loan a percentage of the home's purchase price or the market appraisal of the property. Cost depends on the size and complexity of the assignment.
   
• Land survey: 
  The lender may ask for a current survey or certificate of location before signing off on the loan. There can be a substantial cost for having a new survey done on the property.
   
• Deposit:
  A deposit normally goes with the formal offer to purchase.
   
• Insurance: 
  The lender will require proof of property insurance for the replacement value of the house and its contents from the day you take ownership.
   
• Title insurance: 
  Provides coverage in case of problems with the property title among other things. The cost is relatively low, usually a few hundred dollars.
   
• Application fee: 
  Some lenders will pass on the cost to process your application. These fees vary and some lenders will waive them entirely if you have other accounts with them.
   
• Mortgage broker's fee: 
  If you use a mortgage broker, a fee may be charged to arrange a mortgage on your behalf.
   
• Home inspection fee: 
  An inspection protects the buyer by revealing any problems in the property that you'd want to know before you move in.
   
• Legal fees: 
  You can save some of the legal fees usually charged by the lender if your lawyer draws up the mortgage. You'll also pay for disbursements which are the costs involved in drawing up the title deed, conducting a title search, and preparing and registering the mortgage.
   
• Land Transfer Tax: 
  Use the land transfer tax calculator accessible from the home page of this website to calculate both your Ontario and City of Toronto (if applicable) land transfer taxes. First time home buyers qualify for a maximum $2,000 (LTT on a $227,500 home) provincial rebate and a maximum $3,725 (LTT on a $400,000 home) City of Toronto rebate.
   
• Goods and Services Tax: 
  Resale (used) homes are exempt from GST but it does apply to newly constructed homes and may qualify for a partial rebate depending on the sales price and if the home is going to be your primary place of residence.
   
• For new homes costing $350,000 or less, you will receive a GST rebate of 36% of the GST paid to a maximum of $8,750. The rebate for new homes costing between $350,000 and $450,000 declines to zero on a proportional basis. GST also applies to most of the services provided in completing the real estate transaction.
   
• Other costs: 
  These include moving costs, fees charged by utilities for service hook-ups, property tax and other adjustments (an adjustment takes place when the seller has already paid for something in advance and wants to be credited for the unused portion on the date the house becomes yours), and ongoing maintenance (condo fees, etc.), and utility costs.

Life Leases

I am preparing to list a land lease for the first time. As many people are not aware of what a life lease is, I decided to write about them in my blogg.

First of all, who are life leases for?

Life leases were developed for those older adults, who are able to live independently. It is an alternative housing option, one that lies in the between the options of independent living in your home whether you own or rent and residing in a retirement home or long term care facility.  Living in a life lease project involves a lower level of personal care options compared to what would be provided in a retirement home or long term care facility.

The organizations that develop and operate the life lease housing are the “sponsors”. Life leases are usually priced under what similar housing is selling for in the same area.

When a person buys a life lease, they sign an agreement with the sponsor.  The agreement gives the byer the right to occupy the unit.

Ownership? Hybrid type of tenure.

When you buy a life lease you hold an interest in the property, you buy the right to live in the unit, the right to occupy your unit for an upfront lump payment and monthly maintenance fees and property tax payment. Life lease holders appears to be owners as they are responsible for repairs to their own units and they have to provide for their own appliances and responsible to pay for the property taxes associated with their unit. In some way these holders are like owners but in other way they are like renters as they have little input on how the building is managed. There is not title to the unit that is passed to the holders, this is why there is no land transfer tax, what is purchased is the right to occupy their unit.

In Ontario there are different forms of life lease models, the market value type is the most common. Life lease purchasers pay market value for their interest and when they move out, they sell their interest at market value, the sponsor of the development at that time often charges and administrations fees from 3 to 10% for the transaction. The occupant of the unit bears the risk or any loss in value of the unit but benefits if the unit goes up in value.

Is it considered rental or ownership? It is neither, the models of a life lease share some of the characteristics of both rental and ownership.

Reasons why a life lease makes sense to some seniors.

 There are less responsibilities than there would be when living in your own home.
There is access to social and recreation programs and meal services and care options that the sponsor can offer on site. It helps with a sense of community, primarily for seniors.

Interest versus ownership, the nature of tenure, can make them more affordable. The land transfer tax does not apply, but in most of them there is a transfer fee which needs to be paid to the sponsor. This fee can be large, up to 10 % of the value of the life lease.

A active senior, who is able to live in their own place may chose a life lease in a building that is convenient to them for a number of reasons, for one thing, they will get a unit for less money than a comparable condominium unit. They will have access to some services, should they need them in the future. They will be near other seniors, while maintaining their independence.  I hope I was able to give you a bit on an idea of what a life lease is, please feel free to ask me any questions regarding these types of tenures as well as to any information about this great 2 bedroom, 2 bath unit that is coming up on the market in August.