What is the minimum down payment needed to purchase a home?

The least amount you can put down is 5% of the purchase price.  This is considered a high-ratio mortgage.  A conventional mortgage requires a down payment of 20% down or more.

What is mortgage insurance and will I have to pay for it?

Anyone with a down payment of less than 20% will be required to have the security of mortgage insurance.  The cost of this insurance can range between 0.65% and 2.75% depending on the actual amount you decide to put down.

How much will the deposit be after my offer has been accepted and all conditions removed?

Deposits most often are approximately 5% of the purchase price and usually paid on the subject removal day.  Your deposit is best paid by bank draft and will be held in trust until the Lawyer or Notary calls for it to complete the transaction.  You will see this amount on your Statement of Adjustments when you go in to sign documents closer to completion day.

Who pays for an appraisal fee and do I need one?

Your mortgage lender may require the property to be appraised at your expense.  An appraisal is an estimate of the value of the home and is used in comparison of the asking price on the Contract of Purchase of Sale.  In other words, will the lender be able to recoup its investment without incurring losses.  This fee (between $250-$350) may be waived in return for your mortgage so be sure to confirm this when you shop around.

How much should I expect to pay for a home inspection?

Depends on the size of the home and whether it is attached or detached but always a worthy investment in the end.  Attached can range from $450 – $600 while detached homes tend to start about $600 and go up accordingly.  GST is paid on inspection services and most Inspectors can take a cheque or credit card.  Be careful to confirm the cancellation window as this can range from 24-48 hours and could result in full payment.

Will I need home insurance and what type do I get?

Most, if not all mortgage lenders will require proof of an insurance policy in place as at 12:01am on completion day.  It’s best to confirm the exact type of insurance expected by the lender, along with any extra riders that may be required.  Insurance can be purchased anywhere auto insurance is sold and be sure to shop around for the best rate.

How much money should I be setting aside or freeing up to have ready to go for my purchase?

Each transaction will differ slightly which is why we take the time to go through your specific needs.  It is important to note that this is intended as a guideline only and, as with any budget, you should allow for a cushion if possible.  Better safe than scrambling.   When you sit down with your Lawyer or Notary prior to completion day you will be reviewing the Statement of Adjustments and this is where you will see the exact amount owing of the items below.

Your deposit will be the largest cash outlay, a minimum of 5% of the purchase price. Due at time of subject removals.

Property Transfer Tax (PTT):  This is a provincial tax that you may have to pay if your name has been on the title of a property anywhere in the world.  You will be required to pay 1% on the 1st $200,000 + 2% on the balance.  For example: a property worth $300,000 will have PTT due of $4,000. If you are a first time buyer, you may be exempt.

Legal / Conveyancing Fees: Charges range between $800 to $1,500 + gst depending on whether you use a Lawyer or Notary and what special requirements are called for to be able to convey your property at land titles.

Disbursements:  Adjustments will need to be made for any pre-paid property taxes (these are the yearly taxes paid on the property), water and/or garbage charges if billed separately and strata fees if applicable.