Down Payment for the Purchase of your first home: What You Need to Know.

Down payment for the purchase of your first house: what you need to know

The down payment is the most important amount of money you need to raise for the purchase of your house. This amount is a deciding factor when it comes to determining your mortgage options and the maximum price you can pay for a house.

Where to start? How much do you need to accumulate? What is the minimum percentage? Is mortgage insurance mandatory?

This article bellow will tell you what you need to know about the down payment for the purchase of your first house.

To begin with, you must understand what a down payment is, and determine your borrowing capacity. Meet with a mortgage broker to explore your options. You should also request a mortgage preapproval to have a good idea of the maximal amount your can pay for a house, which will also determine the amount required for the down payment.

If the purchase price of the home is $500,000 or less

The minimum down payment will be 5% of the property value. In the case of buying a duplex, the owner-occupants are also required to make a 5% down payment. However, if both units are being rented out, future owners will have to put down 20%.

If the purchase price of the home exceeds $500,000

The down payment for the property will be 5% of the first $500,000 of the purchase price, plus 10% of the remainder. For example, if you consider buying a home listed for $700,000, the down payment will be $45,000: that’s 5% of $500,000 ($25,000), plus 10% of $200,000 ($20,000).

For a property that costs $1 million or more, the minimum down payment is 20% of the purchase price.

Thanks to our "all inclusive" services , by working with us, you will immediatly get access to one of the most extensive network of professionals in the country, contact us today for more informations.  This service is free and with no obligation.