๐ Your down payment is the initial contribution when purchasing a property through mortgage financing. In Canada, it's a necessity since lenders can provide a mortgage for up to 95% of the property's value, leaving you responsible for at least 5% as a down payment.
๐ข Important to note: A down payment of less than 20% requires mortgage default insurance. This is provided by organizations like the Canadian Mortgage and Housing Corporation (CMHC), Sagen (formerly Genworth Canada), and Canada Guaranty. The insurance cost is typically rolled into the total mortgage amount and varies based on the down payment percentage.
Given that a down payment can be a significant amount, it's crucial to have a strategy in place to accumulate it. Here are some options for building your down payment:
๐ฐ Personal Savings
๐ก Proceeds from the Sale of Another Property
๐ฆ Utilizing RRSPs via the Home Buyerโs Plan
๐ Gifted Down Payment
๐ผ Borrowed Down Payment
If you're considering your down payment options or have questions about mortgage financing, remember it's never too early to start discussions about the mortgage pre-approval process. Feel free to reach out at any time to begin the conversation. Your financial goals are important to me, and I'm here to assist you every step of the way. ๐ค๐ธ
https://www.dianebuchanan.ca/
