All Things Down Payment

A down payment is an upfront payment made by a home buyer to the seller of their home.  It represents a portion of the home’s total purchase price.  To finance the remaining portion of the house purchase price, the homebuyer will frequently obtain a mortgage from a bank or other financial institution. The buyer will need to borrow less money to pay for the remaining portion of the house with a higher down payment, resulting in lower monthly payments and less interest paid.

What is the Minimum Amount Needed?

The needed minimum down payment in Canada is 5%. Any mortgage with a high ratio below 20% needs mortgage default insurance. This safeguards the lender if the borrower misses payments. You can pay for your mortgage loan insurance upfront or include it in your regular mortgage payments.

How Much is a Down Payment?

One of the most important requirements you’ll need to address while looking for a new house is how much you can afford to put down as a down payment. Depending on the style of home you’re buying, the size of the mortgage you take out, and other circumstances, the down payment amount in Canada might vary significantly. Understanding the down payment needed for a home will help you assess your financial readiness for the purchase.

Is a Deposit the same as a Down payment?

Several clients want more information on the down payment and the deposit. Consider the down payment as a portion of your down payment. The amount may change depending on the pricing and how serious you are about buying the house. With the offer to purchase, the deposit is submitted as part of the conditions. Your needed down payment will be reduced by the amount of this deposit.

There is a lot to learn about purchasing a property before getting started. Use me as your real estate expert to help you understand your requirements and possibilities. You don’t have to travel this path alone because your financial adviser, attorney, and myself are knowledgeable on the ins and outs of the purchasing process.

What is Mortgage Loan Insurance?

If you are unable to make your monthly mortgage payments, mortgage loan insurance, also known as mortgage default insurance, protects the mortgage lender. Even if you have a 20% down payment and are self-employed or have a bad credit history, a lender may still require mortgage loan insurance even if you have 20% down.

Depending on the size of your down payment, mortgage loan insurance premiums might range from 0.6 percent to 4.5 percent of the total loan amount. It can be paid in full upfront or by including it in your mortgage payment; in the latter instance, interest will be charged on the premium. If you require mortgage loan insurance, your mortgage lender will arrange for it on your behalf.

Is a Higher Down Payment Better?

Now you have more money in your pocket thanks to a larger down payment. In addition to not having to pay mortgage default insurance, making a bigger down payment will result in a smaller mortgage loan, which will result in cheaper interest rates throughout the standard 25-year amortization period.

The majority of Canadians are unable to afford a sizable down payment. This is not a bad thing because it can free up money for other home-buying costs if the down payment is lower. In the end, a higher down payment might be preferred, but if you have the required finances, don’t allow that to stop you from purchasing the home you desire.

How to Save for a Down Payment?

Saving up for a down payment might be the biggest barrier to homeownership for purchasers in several of Canada’s most expensive housing areas. Start saving as soon as you can if you want to buy a house. You have time on your side.

First-Time Home Buyer Incentives

For first-time homebuyers, the Canadian government provides several programs and incentives to lessen the financial burden.

Visit Nova Scotia’s Housing Grants & Financial Assistance Programs to obtain various first-time home buyer incentives that can make purchasing a property simpler. If you have previously owned a home, you may still be eligible.

CALL ME SO WE CAN GET YOUR PRE-APPROVAL STARTED!

Hello there! I’m Alisha Caillie-Fleet, a seasoned Real Estate Agent located in Halifax. With a sales history dating back to 2014 across Nova Scotia and Ontario, I bring a wealth of expertise to the table. My specialization includes residential properties, investment opportunities, and military relocations. I’ve wholeheartedly committed myself to honing my skills to ensure that your experience of buying or selling a home is seamless and free of stress.

Being a military spouse, I also have personal insight into the challenges military families are confronted with. As a result, I’ve developed a tailored approach to cater to the unique demands of the DND moving process.

Let’s establish a connection and have a conversation about your real estate goals!