HOW MUCH WILL I INITIALLY NEED?
You will need enough funds to cover your down payment and closing costs, as well as the remaining balance on the cost of the home. This can be sourced through financing or other means.
A LARGER DOWN PAYMENT MEANS GREATER SAVINGS
The money you pay up-front for a house is the down payment. Down payments are typically a percentage of the purchase price of the home. The source of money for your down payment is often either your savings or the net proceeds from the sale of a home you already own. The larger your down payment, the more you save in the long run. A larger down payment:
- Reduces the amount of your monthly principal and interest payment
- Reduces the total amount of interest you pay over the life of your mortgage
- Your Mortgage Specialist can help you compare mortgages, determine which mortgage is right for you, and show you money-saving strategies.
Closing costs are the legal and administrative fees and disbursements associated with buying your home. These costs are in addition to the purchase price of the home. They can vary widely depending on:
- The property being purchased
- Services required
- Applicable insurances
- Closing dates affecting interest adjustments
- The balances of any prepaid expenses
ASK ABOUT THE HOME BUYERS’ PLAN
The Home Buyers’ Plan (HBP) lets a first-time buyer withdraw up to $20,000 from RRSPs for a home purchase, subject to certain repayment conditions. For more information, check the Canada Customs and Revenue Agency website.
Courtesy of: http://www.royallepage.ca/en/realestateguide/financing/organizing/down-payment.aspx