So you’re thinking of buying a house, how exciting! It’s a truly rewarding experience – once you’ve deciphered all of the real estate terminologies.
Some of the first things you’ll want to sort out before buying a home is your deposit and your down payment. What are they exactly? That’s what I’m here to teach you.
Your Deposit
When you make an offer on a house, you’ll more than likely be required to make a deposit, which will go towards your down payment (don’t worry, we’ll get to that later). It secures the property and shows that you’re really interested and serious about the house. There’s no standard amount for what you should offer as a deposit; it will depend on the house’s worth and the local market at the time. When you work with me, I’ll guide you through the process and help you figure out the best price. Usually, the deposit is due at the same time you make the offer, or within 24 hours of their offer acceptance. If it’s a conditional deal and it falls through, a waiver is signed by both parties. This is an agreement that the offer won’t close and the deposit will be returned without penalty.
Your Down Payment
Your down payment is the money that you put up front when you buy the property. When you buy your new home, the money from your deposit will go towards the down payment. The minimum down payment to purchase a home in Ontario is 5%, and you’ll be required to confirm that you’re able to cover the costs to close your mortgage. If your down payment is less than 20%, you’ll have to purchase mortgage default insurance, aka CMHC insurance.
Remember, you don’t have to go through the buying process alone – I’m happy to help! Whether you’re a first timer or a seasoned buyer, there’s a lot of information to sort through. You can see what else every buyer should know here, or feel free to email me with any questions.
