When you initially buy a property, and you need a mortgage, the mortgage
lender may insist on a recent "building location" survey. These surveys
cost about $1000 in an urban area, and are likely even more expensive in
outlying areas. Eight cases out of ten, lenders will accept an old survey
with the Vendor declaring that no changes have occurred to the property
since the survey was done. The purpose to the survey is the guarantee
the building set backs from the property lines conform to the local bylaws,
and to show that neither you, nor your neighbours are encroaching on one
another's property. Although it is preferable to have a survey, often
a visual check of the lot is good enough for you to believe that everything
is in order. If the subject house is in the middle of its lot, and
your neighbours' house is in the middle of that lot next door, and there
are no signs of young trees or new fencing, chances are everything is OK.
The lender however may insist on a survey to prove the integrity of the
lot. Spending an additional $1000 on day of closing (that's when
you actually take possession of your purchase) can be imposing. An
alternative to a survey is now possible in Ontario and some parts of Quebec,
it is called "title insurance."
Title insurance is meant to protect the lender in case of title defects,
that a survey would likely have caught. Title insurance can be purchased
by the lender for a fraction of the cost of a survey. It should not
be construed as equivalent. The survey will protect you at the onset,
while the title insurance will protect the lender in case of future trouble.
When you purchase a property, money is going to be tight. The last thing you need is a surprise tax billing. In most cases in Ontario, if your down payment is less than 25%, your lender will insist on you paying the property taxes through your mortgage payments. And in most cases, you will be obliged to prepay your taxes by at least four months. The reason why the taxes must be prepaid is because your municipality wants your whole year's worth of property taxes paid in full by September. Your lender knows that tax arrears take precedence to their mortgage. Be aware.