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Category: Closing costs

  • Five tips for a quick closing to your mortgage refinance

    Five tips for a quick closing to your mortgage refinance

    If you are closing your mortgage refinance, you’ll likely be required to use a lawyer or a title company to close your new mortgage.

    Refinancing a mortgage means paying off an existing loan (mortgage) and replacing it with a new one.  In most scenarios, your new lender may be a different institution than the one that holds your current mortgage and part of the amount you borrow may be used to pay off your existing loan to your current lender.

    Closing mortgage refinance delays are not uncommon and are caused by a variety of factors.  There are, however, multiple things you can do to ensure your mortgage refinance closing happens seamlessly and on time.  Here are some of them:

    Have valid government photo ID

    Since the beginning of the pandemic, many Canadians have not had the opportunity to renew their drivers’ license or passports. 

    While there has been a grace period during the pandemic, a valid government-issued photo ID is required.  If you are planning to close on a property or a mortgage, an expired drivers’ license or passport will not be accepted.  

    Ensure you provide updated debt statements

    If you are refinancing to consolidate debt, your lender may require your lawyer or title company to pay off your debtors out of the proceeds of your refinance.  For your debtors to be paid and to avoid accumulating additional interest, you will likely be asked for the latest statements for each debt.

    If you’ve already provided these statements to your mortgage agent or bank, you may be wondering why you may need to resubmit them again.   Occasionally the mortgage application to approval process may take weeks.  If a statement is out-of-date, the balances to be paid may be incorrect.  Therefore, you may need to obtain statements again for the purpose of closing.

    Statements must contain key items such as your name, your account number, and your most recent balance to be processed.  Most statements can be obtained online through online banking or by calling the company.  It may be a tedious process, but the quicker you can obtain the statements, the quicker your refinance can close and the impact of consolidating debt takes effect.

    Provide your lender with lawyer’s information

    Your lender will require your lawyer’s information to send mortgage instruction to the lawyer’s office.  In most cases, this information will be required when you sign your new mortgage commitment.  Delaying providing your lawyer’s coordinates and contact information to your lender may delay your closing.

    Schedule closing off peak

    Real Estate and Mortgage transactions peak from April through September and because purchases and sales have a firm deadline, chances are your refinance closing may get delayed.  If possible, choosing a closing date in the beginning or the month will increase the chances of your mortgage refinance closing on time.

    Close virtually

    Virtual closing is now an option in most Canadian provinces.  Quite simply, it means that you can sign your closing documents from the comfort of your home, without having to go into a lawyer’s or notary’s office.  

    A virtual closing isn’t only a convenient option, but when it comes to accelerating the closing of your mortgage, it eliminates a lot of the back-and-forth scheduling and time constraints required to book an appointment.   When you use Deeded, our virtual closing experience can be completed in the evenings and even on weekends.

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  • Can you close your Alberta property from out-of-province?

    Can you close your Alberta property from out-of-province?

    Compared to Real Estate markets like Ontario and British Columbia who have seen overwhelming increases in home prices in recent years, Alberta’s Real Estate market remains relatively affordable for Canadians.  With a lower average home price, Alberta Real Estate also generates plenty of investment opportunities with positive cashflow and has become a popular destination amongst Real Estate investors.

    When it comes to closing your Alberta property, you’ll need to use an Alberta-licensed Real Estate Lawyer to close your transaction.  If you are out-of-province aren’t physically located in Alberta yet (perhaps you’re still in the process of moving or buying an investment property and reside in another province), your closing may either involve travelling to Alberta to sign your closing documents or hiring an additional lawyer or notary that is local to you, to witness the signing of your documents.

    Alberta saw more new residents and Real Estate investors in 2021 than any other province in the country.  If you are one of the many people who are considering relocating to Alberta or buying an Alberta investment property, here are some key things that you need to know about the closing process in Alberta and how our team at Deeded can make your Alberta property closing seamless and affordable.

    Both travelling to Alberta and hiring an additional lawyer can add to the costs, and complexity of closing your Alberta Real Estate transaction.  At Deeded, our virtual closing process helps you avoid both travel and the additional costs.   Here’s how it works:

    1. Initiate your closing by getting a quote through our website and uploading your Alberta purchase contract.
    2. Our friendly team will get in touch to explain the closing process and answer any questions you may have.
    3. An Alberta Real Estate Lawyer will work with you and your bank and/or mortgage broker to get your mortgage proceeds (if applicable).  You can seamlessly deposit your down payment funds into the lawyer’s trust account at any Canadian branch of TD bank.
    4. When it’s time to sign your closing documents, you’ll meet your Alberta Real Estate lawyer via secure video conference to sign your documents.
    5. Once your property is registered, they will arrange transfer of keys to you or your property manager.
    6. You can track the entire process through a user-friendly, personalized portal so you always know what’s next.

    What are the benefits of a virtual closing process for Alberta Real Estate?

    You’ll typically save time and money by not needing to travel to Alberta to sign your closing documents and avoid the additional costs of hiring an additional local lawyer to witness you signing your closing documents.   A virtual closing is secure, seamless, and efficient.

    Can you close properties in all cities within Alberta?

    Yes.  Whether your property is in Calgary, Edmonton, Medicine Hat, or anywhere else in Alberta, we can help you close.

    Do I physically need to be in Alberta to sign closing documents?

    No.  You can be anywhere in Canada.  All you need is a computer with a video camera and a reliable internet connection to attend your virtual signing appointment.

    I’ll be moving to Alberta.  Can you help me close my sale as well?

    Absolutely.  If your current property is anywhere in Ontario or British Columbia, we can help facilitate the closing of your sale, along with your Alberta purchase. 

    Can you help me refinance my Alberta investment property?

    We certainly can.  The same virtual process and benefits apply when you’re refinancing your Alberta property. Simply ask your lender or mortgage broker to use Deeded to close.

    Are there extra costs for this service?

    We certainly can.  The same virtual process and benefits apply when you’re refinancing your Alberta property.   Simply ask your lender or mortgage broker to use Deeded to close.

    How do I get started with closing?

    Simply click here to submit your information and purchase contract.

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  • Does Alberta have a land transfer tax?

    Does Alberta have a land transfer tax?

    If you’re considering moving to Alberta or buying an Alberta investment property, the question if Alberta properties are subject to a land transfer tax (or property transfer tax as it may be called in some provinces), comes up quite often.

    Does Alberta have a land transfer tax? The short answer is no.  While most Canadian provinces levy a property or land transfer tax, Alberta requires only Land Transfer Registration Fees and Mortgage Registration Fees to be paid.

    The amount of these fees is much smaller when compared to other provinces.  Here’s a breakdown of the fees you can expect:

    • The Land Transfer Registration Fee costs a base of $50 and an additional $2 for every $5000 in property value.
    •  If you have a mortgage on your property, a Mortgage Registration Fee applies and costs a base of $50 and an additional $1.5 per $5000 on the mortgage amount.

    It's important to note that these fees and any legislation regarding land transfer taxes or applicable closing costs may change at any time. Always check with your lawyer or real estate professional prior to signing an agreement.

    For example, a $300,000 Alberta property with a $200,000 mortgage would cost:

    • Land transfer registration fees:  $170
    • Mortgage registration fees: $110

    These fees tend to be a small fraction of what a homebuyer could potentially pay for Land Transfer Taxes if buying a property in Ontario or British Columbia, making Alberta an attractive and cost-efficient place to purchase a property.

    If you’re purchasing or refinancing a property in Alberta, the Deeded team can help you close your transaction seamlessly with our virtual process.  You can sign your documents virtually from anywhere in Canada, saving you from having to travel to Alberta or retaining a second lawyer locally to witness your document signing.  

    Getting your Alberta closing process started is simple.  Click here to get started, upload your purchase contract, and we’ll get you on your way to owning your Alberta property.

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  • Closing costs for refinancing your mortgage

    Closing costs for refinancing your mortgage

    With record low interest rates, more homeowners are refinancing their mortgage.  One question we get very often is what the closing costs are for refinancing a mortgage.

    Before we break it down further, you may be caught by surprise that you even need to “close” your mortgage refinance.  You likely remember having to close your home purchase, but refinancing your mortgage? The short answer is, you have to close your mortgage refinances as well. Here's why.

    Refinancing a mortgage means paying off an existing loan (mortgage) and replacing it with a new one.  In most scenarios, your new lender may be a different institution than the one that holds your current mortgage and part of the amount you borrow may be used to pay off your existing loan to your current lender.

    When you refinance your mortgage, your new lender approves your mortgage application and issues a mortgage commitment. At that point, the closing process kicks off and includes formalizing your new mortgage, while paying off your old mortgage from the proceeds of the refinance.

    The mortgage refinancing closing process resembles some steps you may remember from purchasing your home. 

    Namely the title for the property is searched to verify your ownership, you will sign documents for your new mortgage, writs or court orders against the homeowners are searched, your current mortgage gets paid off and discharged and your new mortgage gets registered on title. Your lender may require a title insurance policy as well. When all these steps are done, the remaining funds are distributed as applicable.

    At Deeded, we can help you close your mortgage refinance seamlessly from the comfort of your home.  Get started by getting a free quote.

    Completing these tasks is usually done by a lawyer, notary, or title company and the closing costs for refinancing your mortgage, in most cases, is paid for by the homeowner (or borrower).

    The closing costs for refinancing your mortgage can vary from province to province and can depend on factors such as the number of mortgages on the property, lender conditions, government fees, registration costs and others.  Depending on the circumstances, a mortgage refinance may also require Independent Legal Advice (or ILA for short), for one or more of the borrowing parties.

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  • Understanding the Statement of Adjustments and Trust Ledger

    Understanding the Statement of Adjustments and Trust Ledger

    The Most Important Documents in your Closing - Statement of Adjustments and Trust Ledger Statement.

    When you’re buying or selling a home, you will likely encounter two important documents called a Statement of Adjustments and a Trust Ledger Statement.  

    These two documents are the two that get the most attention from the buyer or seller, and are incredibly important because they help you make sense of the all costs and expenses that are associated with buying or selling a home. 

    To ensure that you manage your budgets and have a smooth closing, understanding your statement of adjustment and trust ledger are vital. They allow you to easily see the breakdown of all expenses and know decisively how much you will owe at the end of the day if you're the buyer, or how much you should expect to receive if you're the seller. 

    The way these documents are formatted is more like an accounting statement.   We know not everyone has an accounting degree, so follow along and you'll be able to understand these statement in no-time.

    What is a Statement of Adjustment?

    A statement of adjustment is very similar to your personal bank statement, however, instead of listing your personal transactions, it is a record of your Real Estate or Mortgage transaction. Statements of adjustment are used by both buyers and sellers to know exactly the proceeds they receive, or how much they owe to complete the transaction. 

    Essentially, the statement of adjustment will list the purchase price for the home followed by any additional costs that need to be added, finally subtracting any deposits already made to determine what will be the total cost at the time of closing.

    Example of a Statement of Adjustments

    Like an accounting statement, when creating a statement of adjustments, costs paid to the seller go under "credit seller". Whereas costs paid by the buyer go under the "credit buyer" column. 

    Here's an example for a residential property sold in Ontario.

    • The sale price is $500,000
    • There was a deposit of $50,000 made by the buyer
    • The seller pre-paid utilities at a cost of $500, however they only occupied the house for 150 days and need to be reimbursed for the half, therefore $250 will be credited.

    If you’re reading this correctly, the buyer will owe the seller $450,250 on closing, after accounting for the deposit and utilities adjustment.

    What is a Trust Ledger?

    Similar to the statement of adjustment, both the buyer and seller’s lawyers will create a trust ledger, this time with the purpose of showing how the money will be allocated after the closing.  If you are refinancing your mortgage, your lawyer will also prepare a trust ledger statement with the details of mortgage changes.   

    A Trust Ledger Statement is prepared for both the buyer and seller to show all remaining expenses for both parties. In the case of the buyer, after completing the statement of adjustments, the full amount payable to the seller is then moved over to the Trust Ledger Statement.

    The Trust Ledger Statement shows all of the money involved in the transaction on closing day, but also includes other costs such as legal fees and disbursements, land transfer tax, title insurance, etc. 

    For sellers, the closing costs they have are subtracted from the amount owed to them by their buyer to determine the total amount they will receive after closing (after a mortgage is paid off, for example).

    Example of Trust Ledgers

    In contrast to the statement of adjustment, a trust ledger will vary between a buyer and seller because they each will incur different costs after closing. 

    The Trust Ledger Statement shows the remaining expenses for both the buyer and seller on closing day, including legal fees and disbursements, realtor fees, land transfer tax, and so on.

    We will create an example trust ledger for the buyer in the previous example assuming he has incurred the following closing fees.

    • Legal fees - $4,800
    • Home inspection fees - $1,200
    • Land transfer tax - $12,000

    The seller's trust ledger will similarly start by bringing the price paid and subtract any associated closing costs to determine the total earnings from the sale for the seller. 

    We will create an example of the seller’s ledger assuming the seller pays the below closing costs. 

    • Legal Fees - $2,200
    • Real Estate Commission - $25,000

    As your purchase, sale or refinance transaction moves towards closing, you’ll receive copies of the Statement of Adjustments and Trust Ledger to review for accuracy.   It is important that you take the time to understand, review and ask any questions.

    If this looks overwhelming to you, rest assured that the Deeded team is here to make things easier and simpler. We walk you through all your documents and ensure that you understand every aspect of your transaction.

    Important Note: This article is not Legal Advice.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

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  • The Top Real Estate Closing Costs to Consider in Alberta

    The Top Real Estate Closing Costs to Consider in Alberta

    It is too often that we get clients who are closing the purchase or sale of their home in Alberta and are surprised to find out that they did not budget for all their real estate closing costs.

    Nothing is more stressful than finding out you have to scramble to come up with more money for your closing.   Nobody likes surprises.  That’s why we are always aiming to educate our clients and partners early in the home buying or selling process.

    If you are buying or selling a home in Alberta, here are some of the real estate closing costs you may encounter:

    Legal Fees

    In Alberta, you will need a lawyer to close your Real Estate transaction.  Legal fees can range from $800 - $1500 and can sometimes include or exclude disbursements (expenses incurred by the lawyer, which are typically passed on to you such as couriers, search costs or other fees).

    When comparing legal fees, ask for an estimate of total fees you can expect to pay for your closing, including disbursements.

    At Deeded, we offer a flat fee for closings and you can calculate your full real estate closing costs on our website. 

    Adjustment Fees

    Say you are buying a home, closing in July and the seller has prepaid their full property taxes for the full calendar year.   In this situation, your lawyer “adjusts” the taxes so that you (as the buyer in this example), would owe a pro-rated portion of the expense to the seller.

    Typical adjustments happen for property taxes, condo/strata fees, or any other fees that may have been pre-paid or unpaid by the buyer or seller.

    It is important to always budget for adjustments as they can increase your real estate closing costs.

    Land Titles Fees

    The cost of transferring land title in Alberta is set by the Land Titles Act and charged by the Alberta Land Titles Office.   It is paid for by the purchaser of the property on closing.

    This fee is calculated based on the value of the property and the mortgage funds borrowed and can be several hundreds of dollars.

    We offer a Land Titles calculator, along with calculating any other closing costs on our website.

    Real Property Report (RPR)

    A Real Property Report (RPR) is a legal document that clearly illustrates the location of significant visible improvements relative to property boundaries.  A seller will typically have to obtain an RPR as a condition of their sale.

    The amount of work (and cost) to prepare a Real Property Report varies between properties. Lot size and shape, number of buildings, natural features, age and availability of the property boundary information all affect the cost.

    Estoppel Certificate Fees

    You need this certificate to purchase a strata unit or a condominium in Alberta.  The estoppel certificate typically costs around $200 and shows you if outstanding interest is due from the previous owner, or if there are any unpaid condo contributions or interest that is due.

    Title Insurance

    Title insurance protects you from unknown title defects (title issues that prevent you from having clear ownership of the property).  For example, existing liens against the property’s title , encroachment issues (e.g. a structure on your property needs to be removed because it is on your neighbour’s property), and Title fraud.

    Title insurance is often recommended, but is optional. The cost of a title insurance policy in Alberta can range from $200 and up, depending on the value of your property and could be a worthwhile investment for peace of mind.

    Property Insurance

    If you are borrowing money for your home, your lender will typically require that you have a certain level of insurance coverage on your home and ask for proof of insurance (also known as an insurance binder), prior to closing. Without insurance, a lender will typically not advance the mortgage funds to the lawyer.

    It is a good idea to call your insurance broker and shop around a few weeks prior to closing.

    Finally, it is important to mention that your fees can vary depending on the property, location and situation. Contact the Deeded team and we’d be happy to give you a more accurate estimate.

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