
Dated: January 30 2021
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A down payment is the amount of money you put towards the purchase of a home. Your lender deducts the down payment from the purchase price of your home. Your mortgage covers the rest of the price of the home.
The minimum amount you need for your down payment depends on the purchase price of the home.
If your down payment is less than 20% of the price of your home, you must purchase mortgage loan insurance.
If you’re self-employed or have a poor credit history, your lender may require a larger down payment.
Normally, the minimum down payment must come from your own funds. It’s better to save for a down payment and minimize your debts.
The calculation of the minimum down payment depends on the purchase price of the home.
Suppose the purchase price of your home is $400,000. You need a minimum down payment of 5% of the purchase price. The purchase price multiplied by 5% is equal to $20,000.
Suppose the purchase price of your home is $600,000. You can calculate your minimum down payment by adding 2 amounts. The first amount is 5% of the first $500,000, which is equal to $25,000. The second amount is 10% of the remaining balance of $100,000, which is equal to $10,000. Add both amounts together which gives you total of $35,000.
Your guide to buying a home in Canada.... For more details please click the below link by Canada Mortgage and Housing Corporation (CMHC) https://assets.cmhc-schl.gc.ca/sites/cmhc/data
What is a minimum down paymentA down payment is the amount of money you put towards the purchase of a home. Your lender deducts the down payment from the purchase price of your home. Your mortgage