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Mortgage Glossary

Terms & Definitions

Closing Costs

Closing costs are expenses homebuyers and homeowners pay when buying a home or refinancing a mortgage, on the closing date.

Homebuyers can accumulate higher closing costs than homeowners who are refinancing their mortgage since there are additional costs such as the land transfer tax, which can be significant depending on where the property is located.

Closing Costs for Home Buyers

In Ontario, Canada there are two land transfer taxes — the provincial land transfer tax and the municipal land transfer tax. The provincial, Ontario land transfer tax is payable by homebuyers all across Ontario. The municipal, Toronto land transfer tax is payable in addition to the provincial sales tax, by those buying a property in Toronto, Scarborough, North York, and Etobicoke.

Toronto homebuyers pay a municipal (Toronto) land transfer tax in addition to the provincial (Ontario) land transfer tax.

Closing Costs For Homeowners When Refinancing

When refinancing a home, there are standard closing costs such as legal fees and disbursements, title insurance, and an appraisal cost.

There are instances where a refinance is being arranged with a private lender or alternative lender, where borrowers will also incur lender fees and broker fees, which are deducted from the mortgage principal at the time of closing.

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