MAKING A DOWN PAYMENT ON A MORTGAGE
The down payment is the amount the home buyer directly provides towards the purchase price.
How much of a down payment needs to be made depends on a variety of factors such as purchase price, insurer regulations, lender guidelines, property type and usage, credit score, and employment history.
Generally, a down payment comes from the client’s own resources (e.g. bank accounts). Under certain conditions and repayment terms, first-time buyers, or buyers who have not owned a primary residence for at least 5 years, may make a down payment from funds withdrawn tax-free from their RRSP.
A non-repayable monetary gift from an immediate family member can also be used for a down payment. A special form is required.
Sometimes it is possible to purchase with quite a low down payment if you have a good credit history, steady employment, and funds to cover the closing costs.
Contact us for help deciding how much of a down payment will work best for you.