When purchasing a home, closing involves several legal steps and costs. Here’s what to expect when meeting with your lawyer to finalize the transaction.

1. Down Payment

• You must provide the balance of your down payment to your lawyer 10-14 days before possession.
• This is the total down payment minus any deposits you’ve already paid.
• Your lawyer will provide an exact figure once all adjustments are made.

2. Property Tax Adjustment

• Property taxes are billed from January 1st to December 31st but are due mid-year.
• If you move in before June 30th, you’ll receive the tax bill for the entire year. Your lawyer will adjust for the days the seller occupied the home.
• If you move in after June 30th, the seller has typically paid the full year’s taxes, and you’ll reimburse them for the days you occupy the home.

3. Tax Holdback (If Required)

• If your lender collects property taxes, they might require a tax holdback.
• This ensures enough funds are in your tax account to cover the next year’s tax bill.
• The amount varies depending on the time of year and your property tax rate.

4. Interest Adjustment Date (IAD)

• The date from which interest on your mortgage is calculated.
• If your closing date and IAD are not the same, you must pay interest for the days between them.
  • Example: If your closing date is the 27th but you set your IAD as the 1st of the next month, you’ll owe interest for the days in between.
  • This interest can either be deducted from the mortgage advance or directly from your bank account.

5. Title Insurance

• May be required by the lender or chosen instead of a new Real Property Report.
• Protects against title defects and legal claims on the property.
• Your lawyer will advise if it’s necessary.

6. Bridge Financing (If Required)

• If your down payment comes from the sale of another property and the sale closes after your purchase, you may need bridge financing.
• This short-term loan covers the gap and is paid off when the other property’s sale is finalized.
• Confirm with your mortgage broker if bridge financing is needed.

7. Fire Insurance

• Required to protect the property and the lender's investment.
• If buying a condo, check if fire insurance is included in the condo fees.
• Provide proof of fire insurance to your lawyer before closing.

8. Legal Fees and Appraisal

• Legal Fees: Cover your lawyer’s services and disbursements. Confirm if quoted fees include all costs.
• Appraisal (If Required): Usually required if the lender needs to verify the property’s value. Check with your mortgage broker if needed.

9. Statement of Adjustments

• Your lawyer will provide a detailed statement outlining all costs, adjustments, and amounts payable.
• You will need to bring funds in the form of a certified cheque or draft, along with:
  • 2 pieces of ID (one with a photo)
  • VOID cheque for setting up mortgage payments
  • Insurance acceptance or waiver (if required by the lender)

Final Tips

• Meet your lawyer about two weeks before closing to review and sign all documents.
• Bring all necessary documentation, including fire insurance proof, ID, and payment method for legal fees.
• Clarify all costs with your lawyer to avoid surprises at closing.