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Greater Savings with a Larger Down Payment

Topic: Real EstateBy Ed AbdouPublished Recently added

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The size of a down payment can vary. Depending on the type of mortgage, down payments generally range from 5% to 20% of the purchase price.

To obtain a conventional mortgage, home buyers are required to put down at least 20% of the purchase price or appraised value (whichever is less) as a down payment. If you don’t have the necessary time or resources to save a full 20% down payment, you can choose a high-ratio mortgage and buy a home with a down payment of as little as 5%. This option is called a high-ratio mortgage and it requires you to purchase default insurance.

Whether you choose a conventional or a high-ratio mortgage, one thing is almost always certain: the larger your down payment, the more you save in the long run.

A larger down payment…
Reduces the amount of your monthly principal and interest paymentr
Reduces the total amount of interest you pay over the life of your mortgager
Ask about the RSP Home Buyers’ Planr
The RSP Home Buyers’ Plan (HBP) lets a first-time buyer withdraw up to $25,000 from RSPs for a home purchase. The withdrawn amount must be repaid within 15 years, subject to a minimum annual repayment that is 1/15 of the amount withdrawn. If the full $25,000 is withdrawn, the minimum annual repayment is $1,333. If less than the minimum is repaid in any particular year, the balance is added to the taxpayer’s income.

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About the Author

Browse Bedford Park property at Edabdou.com. See beautiful Bedford park homes for sale Toronto. Also, find houses for lease & rent in Bedford Park Toronto. I have 18 years of experience providing clients in the GTA with personalized real estate service and has established an outstanding reputation as an invaluable member of the Harvey Kalles team.

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