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These mortgage phrases and terms are included in and form a part of every mortgage which incorporates prescribed standard mortgage terms, either by an election in the mortgage form or by operation of the law.
Survey Certificate
The survey certificate is usually required by the conventional mortgage lender. The cost of obtaining the survey at the time of writing is approximately $410 for the average home. On the purchase agreement, this is at the expense of the seller, unless otherwise agreed by both parties.
Fire Insurance
The lender will require that the borrower carry fire insurance with loss payable first (for a first mortgage) to the first lender, second to the second lender, and so on. It is the borrower's responsibility to carry insurance for a sufficient amount to replace the home. The lender's lawyer will require proof of such insurance before money is advanced. Since the borrower, in most cases, makes the insurance arrangements, there will be no deduction from the mortgage proceeds. The cost of obtaining such insurance should nevertheless be considered.
Appraisal Fees
The lender, before considering loaning money against a property, will want to appoint an appraiser and have an appraisal done. This will show what the value is for the purpose of the mortgage ratios, and that there is value in the security.
It is customary that the cost of such an appraisal be borne by the borrower. A standard appraisal for a typical home is around $200. This is usually paid out of the deposit left by the borrower with the lender at the time the mortgage application is made, or else deducted from the proceeds of the mortgage.
This information was provided by RE/MAX House Calgary.
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