FIRST TIME HOME BUYERS SERIES | WEEK THREE | DOWN PAYMENT

For purchases under $500K, you’ll need a minimum of 5% down. Anything over $500K (and under $1M) requires 10% down, but only on the amount exceeding $500K. Now, let's explore where this down payment can come from:

Effective savings: Whether you're an experienced saver or just getting started, understanding your budget and purchase goals is crucial for determining your required down payment. If you plan to spend $400K, aim for a $20K down payment. Break this amount into manageable monthly contributions and set up automatic transfers to your savings account for a seamless process.

Gifted Down Payment: Generous family gifts for your down payment come with no maximum limit, and repayment is not necessary. Yet, if you're self-employed, 5% must come from your own resources.

The First Home Savings Account  Launched last year, this program allows first-time buyers to contribute up to $8,000 annually, to a total of $40K toward a new home. Stay tuned for more details on this program in coming weeks.

Did you know that some lenders allow for borrowed down payment? You can borrow through a loan, line of credit or credit cards. Keep in mind these borrowed amounts need to be considered in your debt ratios for qualification

First-time buyers may withdraw up to $35K from their RRSPs. If you haven't utilized this option, consider consulting your bank about an RRSP loan. Use the tax refund to alleviate the balance or reinvest it back into your RRSP for added benefits.

Before deciding on a down payment option that works best for you, reach out to a mortgage professional or financial planner. We'll provide personalized advice based on your unique financial situation and guide you toward the most suitable down payment strategy.

If you’d like to explore your options, please feel free to call/text or email me. and as always Like and follow to catch all Mortgage Minutes and I'll be back next week with week four where we’ll talk pre-approvals.