How home closing costs can add up

 Home buyers are often advised to set aside one-to-three per cent of the purchase price of their house for closing costs.  These fees are explained during the home buying process, but it is helpful to ask questions so you fully understand how these costs can affect  your budget.

Legal fees: On average you should budget $600 to $900 for legal fees and an additional $200 to $400 for disbursements, which includes registering the mortgage, completing a tax certificate, and doing a title search on the property.  On top of that you may pay administrative fees for postage, faxing and photocopying.

Shop around. Some law offices specialize in handling mortgage disbursements and offer cheaper rates.  Ask your bank or mortgage broker which law firm they recommend and then call at least 3 other lawyers for quotes.  A few phone calls can save you hundreds of dollars.  I paid $810 for legal fees and disbursements - the next best quote was over $1,000.

Related: Never buy a house without a home inspection

Property tax adjustment: If you buy an existing home, the previous owners have paid property taxes to the City.  On closing, you will be required to reimburse them for the taxes they have prepaid for the year. 

For example if the previous owners paid $2,000 in property taxes for the year and you took possession of their home on June 30, you will be required to pay the owner half the pre-paid taxes, or $1,000.

Interest adjustment Date: Depending on the date chosen by your lender as the interest adjustment (the date the mortgage starts) you may be required to pay interest from the closing date until your interest adjustment date.  The maximum amount would be one month’s interest at the rate of your mortgage.

For example, our mortgage was advanced when we took possession of our home on August 15.  We owed an interest-only payment from the advance date until September 1, which was our interest adjustment date.  Our first full mortgage payment came out on October 1.

While it may sound like you get some reprieve by skipping a monthly mortgage payment, most people want to start eliminating this debt as quickly as possible.

Land Transfer Tax: In general, if you buy land or an interest in land in Ontario, you must pay Ontario's land transfer tax, whether or not the transfer is registered at one of Ontario's land registry office.

Land includes any buildings, buildings to be constructed, and fixtures (such as light fixtures, built-in appliances and cabinetry). The land transfer tax payable is normally based on the amount paid for the land. If you are a first-time homebuyer, you may be eligible for a refund of all or part of the tax.


Calculation of Land Transfer Tax

• 0.5% of the value of the consideration up to and including $55,000,
• 1% of the value of the consideration which exceeds $55,000 up to and including $250,000, and
• 1.5% of the value of the consideration which exceeds $250,000, and
• 2% of the amount by which the value of the consideration exceeds $400,000 for land that contains at least one and not more than two single family residences.
• On July 1, 2010, Ontario introduced a federally administered Harmonized Sales Tax (HST) that applies to most purchases and transactions. The HST applies to newly constructed homes, but does not apply to resale homes. Buyers of new homes will receive a rebate of up to $24,000 regardless of the price of the new home.

Title Insurance: Title insurance does not replace the role of the lawyer. It simply provides an added level of protection for the purchaser(s). Ontario lawyers still must search title and certify the status of title before a title insurance policy can be issued.  For a one-time premium ($150 - $299), the policy protects the purchaser(s) and mortgage lender against losses suffered from matters set out below as well as other matters more specifically outlined in the policy:

• defects that would have been revealed by an up-to-date survey
• survey errors or illegibility of survey
• encroachments (before or after closing)
• contravention of municipal zoning by-laws
• unmarketability of title
• defects in the title
• invalidity or unenforceability of the mortgage on title
• liens
• easements (other than usual easements for utilities, etc.)
• contravention of subdivision, development and other agreements
• priority of certain construction liens
• priority of unregistered easements and rights of way
• fraud or forgery (prior to and after closing)
• solicitor error, omission or fraud
• unpaid property taxes or local improvement charges by a prior owner

Hidden costs can make it difficult to stick to a budget, especially for a first time home buyer.  Be sure to ask your Broker in advance for a detailed description of all your closing costs so they are factored into your overall budget.

Charging the Human Battery

An excerpt from
Charging the Human Battery
by Mac Anderson

The older I get, the more I enjoy Saturday morning. Perhaps it's the quiet solitude that comes with being the first to rise, or maybe it's the unbounded joy of not having to be at work. Either way, the first few hours of a Saturday morning are most enjoyable.

A few weeks ago, I was shuffling toward the garage with a steaming cup of coffee in one hand and the morning paper in the other. What began as a typical Saturday morning turned into one of those lessons that life seems to hand you from time to time. Let me tell you about it:

I turned the dial up into the phone portion of the band on my ham radio in order to listen to a Saturday morning swap net. Along the way, I came across an older sounding chap, with a tremendous signal and a golden voice. You know the kind; he sounded like he should be in the broadcasting business. He was telling whomever he was talking with something about "a thousand marbles." I was intrigued and stopped to listen to what he had to say.

"Well, Tom, it sure sounds like you're busy with your job. I'm sure they pay you well but it's a shame you have to be away from home and your family so much. Hard to believe a young fellow should have to work sixty or seventy hours a week to make ends meet. It's too bad you missed your daughter's dance recital," he continued; "Let me tell you something that has helped me keep my own priorities." And that's when he began to explain his theory of a "thousand marbles."

"You see, I sat down one day and did a little arithmetic. The average person lives about seventy-five years. I know, some live more and some live less, but on average, folks live about seventy-five years.

Now then, I multiplied 75 times 52 and I came up with 3,900, which is the number of Saturdays that the average person has in their entire lifetime. Now, stick with me, Tom, I'm getting to the important part.

It took me until I was fifty-five years old to think about all this in any detail," he went on, "and by that time I had lived through over twenty-eight hundred Saturdays. I got to thinking that if I lived to be seventy-five, I only had about a thousand of them left to enjoy. So I went to a toy store and bought every single marble they had. I ended up having to visit three toy stores to round up 1,000 marbles. I took them home and put them inside a large, clear plastic container right here in the shack next to my gear.

Every Saturday since then, I have taken one marble out and thrown it away. I found that by watching the marbles diminish, I focused more on the really important things in life.

There's nothing like watching your time here on this earth run out to help get your priorities straight.

Now let me tell you one last thing before I sign off with you and take my lovely wife out for breakfast. This morning, I took the very last marble out of the container. I figure that if I make it until next Saturday then I have been given a little extra time. And the one thing we can all use is a little more time.

It was nice to meet you Tom. I hope you spend more time with your family, and I hope to meet you again here on the band. This is a 75 year old man, K9NZQ, clear and going QRT, good morning!"

You could have heard a pin drop on the band when this fellow signed off. I guess he gave us all a lot to think about. I had planned to work on the antenna that morning, and then I was going to meet up with a few hams to work on the next club newsletter.

Instead, I went upstairs and woke my wife up with a kiss. "C'mon honey, I'm taking you and the kids to breakfast."

"What brought this on?" she asked with a smile.

"Oh, nothing special, it's just been a long time since we spent a Saturday together with the kids. And hey, can we stop at a toy store while we're out? I need to buy some marbles."

The most powerful message I've ever heard

An excerpt from
The Strangest Secret
by Earl Nightingale

George Bernard Shaw said, "People are always blaming their circumstances for what they are. I don't believe in circumstances. The people who get on in this world are the people who get up and look for the circumstances they want, and if they can't find them, they make them."

Well, it's pretty apparent, isn't it? And every person who discovered this believed (for a while) that he was the first one to work it out. We become what we think about.

Conversely, the person who has no goal, who doesn't know where he's going, and whose thoughts must therefore be thoughts of confusion, anxiety and worry - his life becomes one of frustration, fear, anxiety and worry. And if he thinks about nothing... he becomes nothing.

How does it work? Why do we become what we think about? Well, I'll tell you how it works, as far as we know. To do this, I want to tell you about a situation that parallels the human mind.

Suppose a farmer has some land, and it's good, fertile land. The land gives the farmer a choice; he may plant in that land whatever he chooses. The land doesn't care. It's up to the farmer to make the decision.

We're comparing the human mind with the land because the mind, like the land, doesn't care what you plant in it. It will return what you plant, but it doesn't care what you plant.

Now, let's say that the farmer has two seeds in his hand- one is a seed of corn, the other is nightshade, a deadly poison. He digs two little holes in the earth and he plants both seeds - one corn, the other nightshade. He covers up the holes, waters and takes care of the land...and what will happen? Invariably, the land will return what was planted.

As it's written in the Bible, "As ye sow, so shall ye reap."

Remember the land doesn't care. It will return poison in just as wonderful abundance as it will corn. So up come the two plants - one corn, one poison.

The human mind is far more fertile, far more incredible and mysterious than the land, but it works the same way. It doesn't care what we plant...success...or failure. A concrete, worthwhile goal...or confusion, misunderstanding, fear, anxiety and so on. But what we plant must return to us.

You see, the human mind is the last great unexplored continent on earth. It contains riches beyond our wildest dreams. It will return anything we want to plant.

Top 10 kitchen renovation tips

By Karen Cole Banack and Melody Duron

From the cabinets to the appliances, find out how to ensure a successful renovation.

Renovating your kitchen will add ease to your lifestyle and value to your home. Here are the 10 most important things to consider when you're updating your kitchen.

1 Use quality materials.
Quality drawer slides and hinges mean cabinet doors will stay closed and drawers won't stick. Stay away from drawers that are stapled together or made of particleboard. For cabinet interiors, wood veneer is more durable than melamine, laminate, MDF or particleboard.

2 Determine cabinet heights.
If you have eight-foot ceilings, choose cabinets that go to the ceiling. They offer more storage, enabling you to use extra wall space for artwork or open shelves. If your ceilings are higher than eight feet, leave 15 to 18 inches above the cabinets.

3 Decide whether to paint or stain.
Though stained-wood cabinetry is forgiving, most finishes date quickly and aren't easily altered. Brush-painted cabinets can lend a unique personality.

4 Select an elegant countertop
White Carrara marble (honed or acid washed and sealed) and stained wood adds elegance and warmth. We also like honed Kirk stone slate, soapstone and Wiarton limestone, and plastic laminate with a wood edge for a sophisticated look.

5 Install an island that works.
Beware of placing a bulky cube in the middle of the room. We like islands that have an open, airy look. Ideally, an island should be unencumbered by appliances, but if you want it to house a dishwasher-sink combo or a cook top, try to maintain the light look of a leggy harvest table.

6 Don't overdo the details.
Design accents such as pediments over stoves and plaster moldings on cabinet fronts can represent decorative excess. Remember that the style of your kitchen should be compatible with the rest of your home.

7 Avoid maintenance nightmares.

Natural surfaces with inherent texture -- slate, terra cotta, brick and tumbled marble -- are more difficult to clean but camouflage the odd crumb. Smooth surfaces in light colours, such as white laminate counters or ceramic floors, are easy to clean but show everything. And as much as we love stainless steel, it's not easy to keep smudge-free.

8 Stick to basic appliances.
Instead of lots of appliances and gadgets, consider selecting a few reliable basics. For example, a commercial-quality stainless-steel range makes an interesting focal point and takes up less space than separate wall ovens and a cook top.

9 Incorporate an adjacent dining room.
A clever design, plus the appropriate lighting and furniture, will let you adapt the room's atmosphere to suit any occasion. Consider a banquette design combined with slip covered chairs for an efficient use of space.

10 Add interest.
Your kitchen should reflect you, not look like a showroom. Before designing the space, search for a piece of unique furniture and use it in your design -- a room full of floor-to-ceiling, wall-to-wall kitchen cabinets looks boring and uninspired.

Love, romance and financial compatibility for couples

This month, even though Valentine's Day might make us think of love and romance, it's not a bad idea to bring up finance. Minimizing conflicts over money is a smart step to take as you begin to plan a future together, whether or not it involves wedlock.

If you're getting serious, now's the time to talk frankly about your finances. Be open about matters that might cause conflict in the future, such as significant debts from student loans or credit cards. Discuss reviewing your credit reports together to avoid unpleasant surprises, like finding out later about collections or bankruptcy.
Set short- and long-term financial goals. Figure out how much money each of you intends to spend on "fun" and how much to set aside for important goals, such as buying a home.

Thinking about opening joint accounts? Weigh the risks and responsibilities. If one co-owner of a credit card goes on a spending spree, the other person may be held responsible for the bill. Irresponsible use of a jointly owned credit card by one partner gets reported on both credit histories, and that could hurt the other person's score—and future likelihood of getting a good loan or credit card.

Getting these discussions out of the way early on might help you avoid potential pitfalls later that have derailed many promising relationships. Here's to love — and stellar credit!

"Customer service is not a department...it's an attitude."

This 3-minute video is a crash course on customer service! It's a simple, but powerful explanation about making your customers feel loved.