Closing costs are one-time expenses associated with the purchase of a home. If you’re settled on purchasing a home, you have to account for these extra outlays in your budget.

A common mistake for homebuyers is to underestimate the amount they’ll need to cover these costs. In general, you should be prepared to pay 1.5% – 4% of the purchase price of a home in closing costs. The actual cost could be higher or lower, depending on a variety of factors, such as the location and type of home you’re purchasing. Your lender will require you to show that you have money set aside to cover closing costs. Rule of thumb is that you have to show up to 1.5% of the purchase price for closing costs on top of your down payment.

Here are some of the different closing costs you can expect before you can legally take possession of your home:

Legal costs – With a purchase as significant as a house, you will need to hire a real estate lawyer to ensure the official legal documents are prepared correctly.

Title insurance – This type of insurance protects you against claims questioning the legal ownership of your property. Title insurance is purchased through a lawyer or notary.

Land transfer tax – A tax levied by provinces that’s payable upon closing. The amount is calculated as a percentage of the purchase price of your home. Some cities have their own land transfer tax, which must be paid as well.

Septic tank and water tests – The septic tank should be tested to ensure it’s working properly, should your house have one. Similarly, if your house has a well, you’ll want to ensure the quality of the water is safe for human consumption.

Estoppel certificate fee – This fee may be required if you’re purchasing a condominium. The estoppel certificate is a legally binding document that allows your lender to find out whether the seller has any outstanding balance owed to a homeowners association or condo corporation.

Property insurance – This type of insurance covers the cost of replacing your home. The insurance policy must be in effect on the closing day. It’s also advisable to obtain adequate coverage to cover the contents of your home.

Prepaid utility bills and property taxes – You may need to reimburse the seller for any prepaid utility bills and property taxes.

Home inspection fee – It’s a good idea to hire a home inspector to scrutinize your home before finalizing the purchase – you don’t want any unexpected surprises.

Moving expenses – You may have to hire movers or rent a van if you’ll be taking a lot of heavy items with you. Also, depending on when your new home will be available to you, you’ll need to temporarily live in a hotel, so make sure to account for this in your budget.

Land Survey fee – This is a fee you may have to incur to produce an official up-to-date certificate of location of your home, should the seller not have one.

Proper budgeting and knowledge of your requirements is the key to ensuring you don’t overspend and miss crucial details. Take the time to make a checklist, carefully estimate the cost, and then shop around to find the best deals in terms of quality and price for legal services, home inspection, insurance, etc. Your mortgage broker or realtor can usually give you a few good recommendations on these industry professionals as well.

Once all is said and done, it’s closing time – and time to finally move into your new home!