Down Payment Options
Downpayment is one of your most important considerations before you look to purchase your new home. If you’re in the “saving up” stage of preparing for home ownership, this is a great time to meet with us so we can discuss your downpayment options. In most cases you want to save five percent of the purchase price.
There are a few options to consider for first-time homebuyers who may have smaller amounts to start:
- The Home Buyers’ Plan (HBP) – first-time homebuyers can withdraw individually $25,000 or $50,000 with a spouse tax-free from their RRSPs, provided they adhere to the repayment plan.
- A gifted downpayment from an immediate family member – can be a source of funds as long as the homebuyer receives in writing that they are not required to pay the money back at any time.
- Start off small – the dream house may be priced too high, so a starter home might be the right option for a first-time homebuyer. A smaller home or maybe a house just outside of the expensive area will help get a foot in the door. The homebuyer can take advantage of the low interest rates to pay off the home quicker and use the equity from the first home to buy the dream home later.
- Build a team of professionals. We’d be happy to recommend preferred partners of ours so together we can build a strong team so that all aspects of your home buying experience are efficient and professional. Your team should include a realtor, lawyer, and a home inspector.
- Plan for closing costs. There are additional costs that come with buying a home so you’ll need to have some extra funds set aside to cover these costs. Generally, you can expect to pay between 1.5% and 4% of the home’s selling price in total closing costs. We can outline all of your closing costs so you won’t be caught by surprise.