I recently read an article by Teresa Chiykowski in the Metro News and thought I would share it.
If you are buying a home for the first time, how much of a down payment will you need to seal the deal? Generally, down payments will range from 5% to 20%.
The minimum down payment depends on a number of factors, such as the type of home, but it as at least 5% of the purchase price of the home.
For Example, to buy a $300,000 home, you will need a minimum of $15,000 as your down payment.
It's important to know that if your down payment is less than 20%, you will be required to pay mortgage default insurance. The insurance premium will vary depending on the percentatge you have as a down payment. The higher your down payment, the lower your mortgage premium will be. Usually, morgage default insurance premiums range from 0.5 to 3% of the borrowed amount.
YES, THERE IS HELP OUT THERE!
Although it can seem a little daunting to come up with a lump sum of money this large, you shouldn't dispair if you are a first time home owner.
The government offeres incentives to help first time home buyers realize their dreams.
Home Buyers' Plan
If you are eligible, you can withdraw up to $25,000 tax free from your registered retirement savings plan to purchase or build a qualifying home. To qualify as a first time homebuyer, you cannot have owned a home as a principal residence for four years before the date of the withdrawal of funds. If you use this plan, you will have to start repaying the amount two years after withdrawing the funds; the entire quantity must be entirely repaid within 15 years.
Home Buyers’ Tax Credit
You are eligible to claim an amount of $5,000 for the Home Buyers’ Tax Credit. This provides up to $750 in federal tax relief. You qualify if you have not lived in another home owned by you or your spouse or common-law partner in any of the four preceding years and you acquire a qualifying home.
To learn more about mortgages and down payments, visit the Canada Mortgage and Housing Corporation website (cmhc-schl.gc.ca).
I WOULD BE HAPPY TO HELP YOU GET STARTED ON YOUR HOME SEARCH TODAY!
CALL OR TEXT ME RICK BUNCICK TODAY AT 519.859.6028