Other Fees - Finance And Security

Depending on the loan, mortgagors can be responsible for:

• a fee to the mortgage broker, of up to one per cent of the principal;

• an appraisal fee of up to $200 for residential properties;

• legal fees and disbursements, of up to one per cent of the principal;

• survey costs, if the survey is more than 10 years old or does not reflect the location and dimensions of the structures on the property, which could be about $500.

There may also be a provincial or territorial tax on the transaction, and a mortgage insurance premium, if your down payment is less than 25 per cent of the total cost.

If you refinance with another lender, you'll have to pay the amount outstanding, a discharge fee, and any prepayment penalties. Borrowers who have budgeted too tightly may have to borrow more at the last minute to meet their obligations. You should know early what these additional costs will be.

Interest is charged by the day for every day you use someone else's money. When you refinance, you have to satisfy both the old lender and the new. If you don't switch at the same time, pulling the interest adjustment date and the closing date as close together as possible, you may find yourself strapped for cash.

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