Congratulations on embarking on your mortgage financing journey!

As you approach the final stages of your transaction, it’s essential to understand the closing process and associated costs, whether you’re buying or refinancing property, or switching lenders. This guide equips you with valuable insights for a seamless process.

The Date:

Your closing date, determined by the lender or specified in the agreement of purchase and sale, or tied to the existing mortgage maturity date, sets the timeline for completing the transaction.

Fulfilling Lender Conditions:

To proceed with closing, meet any outstanding conditions outlined in the lender’s commitment letter. This may involve submitting necessary documentation, ordering an appraisal (arranged by me), or fulfilling specific financial obligations.

Instructions to Your Real Estate Lawyer:

Once lender conditions are met, your lawyer will receive instructions from the lender. They’ll ensure compliance with legal requirements, coordinate with all parties involved, and guide you through the signing process.

Signing of Legal Documents and Fund Transfer:

Sign required legal documents, including the mortgage agreement and transfer of ownership documents (if applicable), before the closing date. Your lawyer will request mortgage funds from the lender, and you’ll provide a draft for closing. This step establishes your legal rights and responsibilities.

Prepare for your meeting with your real estate lawyer by ensuring you have all required identification and documents ready. This typically includes two valid IDs, a void cheque, home insurance binder/letter, credit card or birth certificate, proof of address, and relevant bank account or credit card statements.

The Closing Process:

If Purchasing Property:

  • Your lawyer will provide essential documents from your lending institution, covering your mortgage loan and other details.
  • They will guide you through the paperwork, ensuring your understanding of terms and conditions.
  • Review and sign the documents to proceed smoothly with the transaction.
  • Prepare the remaining funds for your purchase, including the down payment and closing costs.
  • Provide your lawyer with a bank draft for a seamless transaction.
  • Once the funds are received, your lawyer will register the purchase at the Land Title Office, officially making you the property owner.

If Refinancing/Switching Lenders:

  • Your lawyer will oversee the payout process.
  • Debts you wish to settle will be paid out automatically.
  • Additional funds included in the refinance, if any, will be paid out to you by certified cheque or direct deposit.
  • They will ensure the proper distribution of the funds.
  • You’ll receive a trust ledger statement outlining fund allocation.

Closing Costs – Key components include:

  • Land Transfer Tax (if purchasing property): This tax depends on location and purchase price, with rebates for first-time homebuyers. Determine costs in advance.
  • Legal Fees: Engage a Real Estate Lawyer for tasks like reviewing mortgage documents and conducting title searches. I can recommend one.
  • Lender and Brokerage Fees: Review mortgage documentation for additional fees. Note: these fees typically apply to borrowers requiring financing from alternative lenders, while borrowers who meet the criteria of traditional mortgage lenders generally do not encounter these fees.
  • Title Insurance: Protect against title issues. Your lender requires it and is recommended for your protection. Learn more about Title Insurance.
  • Property Appraisal: Required by lenders to assess property value.

Your lawyer will guide you through the legal aspects, ensuring a smooth closing. Prepare for your meeting, review and sign necessary paperwork, and enjoy your financing journey.

Need a lawyer recommendation or want to get an idea of what your closing costs will be? Get in touch!

Subscribe to receive monthly Home, Lifestyle & Economic News here.