Humber/Ontario Real Estate Course 3 Exam Practice

Which of the following costs would not be associated with obtaining a mortgage for a condominium unit?

1. Appraisal fees for market value assessment.

2. Application fees for mortgage processing.

3. Home inspection fees.

4. Land transfer tax based on mortgage principal.

5. Legal fees for document preparation and registration.

6. Property valuation report cost.

The correct answer is: Land transfer tax based on mortgage principal.

The reasoning behind considering the land transfer tax based on mortgage principal as a cost that is not associated with obtaining a mortgage for a condominium unit lies in the nature of the tax itself. The land transfer tax is of a one-time fee that applies to the property purchase during the transfer of ownership, not specifically tied to the mortgage process. When securing a mortgage, the expenses typically include costs directly related to the assessment and processing of the loan. These can involve appraisal fees for establishing the market value of the property, application fees charged by the lender for processing the mortgage application, home inspection fees to ensure the property is in good condition, legal fees for preparing and registering the relevant documents, and costs for a property valuation report that supports the loan application. While the land transfer tax is an important consideration in real estate transactions, it does not specifically pertain to the mortgage itself but rather to the acquisition of the property. Therefore, it is distinct from the other costs involved directly in securing a mortgage.