No. 8 of 10 Things to Consider Before you Buy Your First Home

Down Payment and Closing Costs;

Ø  Your down payment is a percentage of the purchase price and can be as little as 5% (or zero if available in your area) with as much as you like!   It is extremely important to figure out how much of a down payment you have available and also where it is coming from.  Your down payment can come from; your own resources (savings); Home Buyers Plan Withdrawal from RRSP’s; a Gift from a close family member; borrowed funds against proven assets; borrowed funds by way of a loan, line of credit etc. (subject to qualifying); an Equity grant that is non-refundable from a federal, provincial or municipal agency; or Sweat Equity.  The source and amount of your down payment must be “approved” by the lender when taken into consideration based on your overall application.  This may result in you having to increase your down payment to qualify!  It is much better to know this before you go house hunting as it could change your budget! 

Ø  Your closing costs will vary based on; the amount and source of your down payment, and qualifying for First Time Home Buyer Incentives.   Your closing costs may include some or all of the following: GST, PST or HST on new Construction if not included in the purchase price; tax on the Mortgage Insurance Premium for less than 20% down payment; Appraisal Fees; Lawyers Legal Fees including survey, title insurance etc.; Land Transfer Tax; Home Inspection Fee; Status Certificates for Condos; Well and Septic testing fees; Prepaid Property Taxes; Property Tax Holdback to accumulate for when taxes are next due; Prepaid Condo Fees; Utility hook-up fees and deposits; and then anything else; and finally the actual moving costs (moving van, time off work etc.)

I will calculate your actual closing costs as soon as you have an idea of your down payment & property type so you are prepared.