You come to a site like this one not only for help locating the perfect home for you, but also for advice. It's okay to admit you don't know a lot about the details of the real estate industry. What does a driver of a taxi in Toronto really need a bunch of information on real estate particulars for? What you really need is a place where you can look for the essential information, when you are thinking about buying a new house.
Well, one of the most important and essential items in a home transaction from the point of view of the buyer is the down payment. You don't need to look very far to see what an impact a down payment on a house can have. The current recession was kicked off precisely because people in the United States were not putting good down payments on their homes. They used the extra money to buy expensive clothing, toys, and for vacations, but failed to calculate the impact the lack of down payment would have on their mortgage payments each month.
When those payments caught up, the foreclosures began. Fortunately, Canadian laws mean that this scenario was never on the horizon for owners of Vancouver townhomes, Toronto condos, or Charlottetown two storey detached owners. Down payments on homes have been required since the mortgage came into being in this country, although the percentage required has gone up and down.
That means anyone thinking about buying a home anywhere in Canada will need to start thinking about saving up a reasonable amount for a down payment on a home. Usually, that down payment is 5%. In other words, if you are a wedding photographer in Burlington Ontario and you want to buy a $300,000 house, you need to put $15,000 down in order to qualify for the mortgage.
That is certainly not a small sum of money, and most people think they will have trouble saving it up. However, it may not be quite as hard as you think. Most people have problems not with the amount, but with the commitment. You won't be able to save up that kind of money in a month, so it's time to start looking at your budget and committing to put a certain amount of money each month until you have saved enough.
A good analysis of a budget will usually find some places where money can be saved and put in to a down payment account. Do you really need that bike rental, sports jersey, or to go out for meals ten times a week? Right away, saving on such items will yield an extra $500 or more every month.
Where the rest of the money comes from depends on you and your finances. Tax returns, bonuses from the job, and other areas are great infusions of money that can boost your down payment account considerably. Remember, the higher the down payment the less you will pay in interest; it's in your best interests to put down as much as possible when you buy a new home.
If you enjoyed our article about Down Payments, you may also be interested in reading this article regarding how you can go about becoming debt free which is put together by Mclennanandcompany.com. Get out of debt on the road to financial recovery so you can make your down payment on a dream home as soon as possible.