Your Financing

How much will I need for my initial investment in my new home?

 

You'll need a combination of a deposit, down payment and closing costs.

 

DOWN PAYMENT:

The money that you pay up front for a house is the down payment. These payments typically range from 5 to 25% of the total value of the home. The obvious source of money for your down payment is either your savings or the proceeds from the sale of a home you already own.

While it is possible to buy a home with as little as 5% down, the amount of your down payment will determine whether you will have a conventional mortgage or an insured, high-ratio mortgage. What's the difference?

    • Conventional mortgage: Your down payment is at least 25% of the purchase price.
    • High-ratio mortgage: Your down payment is less than 25% of the purchase price and must be insured by CMHC or GEMI. An insurance premium will apply.

    CLOSING COSTS:


    For high-ratio or insured mortgages, the mortgage provider requires the borrower to demonstrate his or her ability to cover closing costs in the amount of 1.5% of the value of the property. Closing costs can be as high as 3% of the value of the property being purchased and can vary widely depending on:

      • The property being purchased
      • Services required
      • Taxes
      • Applicable insurances
      • Whether the home is new or old
      • Closing dates affecting interest adjustments
      • The balances of any prepaid expenses

BREAKDOWN OF CLOSING COSTS:

Fees are based on a purchase of an $82,000 home. Keep in mind some of these costs are approximate:

  1. LEGAL FEES: $325.00
  2. LEGAL FEES TO DRAW UP ACTUAL MORTGAGE DOCUMENT: $125.00
  3. DISBURSEMENTS i.e. Title search etc: $100.00
  4. BANK APPRAISAL FEE: $150.00
  5. BANK MORTGAGE APPLICATION FEE: $100.00
  6. LAND TRANSFER TAX: $310.00

{$60.00 (REG. FEE) + .005(FMV-$30000) +.005(FMV-$90 000) + .005(FMV-$150000) + .005(FMV-200000).}
If property is over $200 000 there is a fee of 2% on the portion of value over $200,000 plus $1 710 base fee.

  1. CMHC INSURANCE :(added to mortgage)
  2. INTEREST ADJUSTMENTS TO VENDOR.

Vendor Does Not Receive Any Money Until The Title Is Transferred. That Is Usually 2-3 Weeks After Possession. The Purchaser Pays The Vendor Interest During This Time: $400.00

    • ADJUSTMENTS OF PROPERTY TAXES: Varies according to time of year
    • FIRE INSURANCE: $250.00
    • SURVEY CERTIFICATE: $275.00
    • N.B. CERTAIN COSTS, PARTICULARLY LAND TRANSFER TAX, INTEREST ADJUSTMENT AND FIRE INSURANCE WILL INCREASE OR DECREASE ACCORDING TO PROPERTY.

 

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