Hi  {first_name} 

Let’s Talk Down Payment!
 
In Canada the minimum down payment that is required to purchase a home is 5% of the purchase price.
 
If you are paying $395,000.00 for a home a 5% down payment is $19,750.00.
 
Lenders also want buyers to have 1.5% of the purchase price in cash for closing costs.
 
Using the above example, an additional $5,925.00 must be available for closing costs.
 
Examples of closing costs include; legal fees, land transfer taxes, an appraisal, a home inspection and moving costs.
 
The total cash required to purchase a modest $395,000.00 home is $25,675.00.
 
There are a couple of sources for a down payment. The obvious one is you saved the money from your own resources. Immediate family (Parents, Siblings or Grandparents) can gift you some or all of the required down payment and closing costs. Many RRSP Plans allow you to borrow all or a portion of the money from the RRSP Account. In vary rare cases some or all of the down payment can be borrowed, this rarely happens.

There are Home Ownership Programs offered by some municipalities in Ontario. These programs are to assist buyers with a down payment. Only a few lenders will accept these programs and usually only as part of the down payment. Lender expect you to have "some skin in the game", you will still need some cash for a down payment.
 
Your Credit Score also comes into play when determining how much of a down payment you maybe required to have by a lender. We will talk more about Credit in our next email.
 
You can reply to this email or use this LINK to book an appointment with me.
 
I look forward to speaking you in the next day or two! Thanks for booking your appointment!
 
Richard

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