Is 5% really what you need to purchase a home in Edmonton....
You've been looking on line and found that perfect home, calculated and saved your 5% downpayment and want to make an offer to purchase. But are you really ready to buy your Edmonton dream home?
Your down payment is the amount of money that a home buyer contributes in cash towards the purchase of a home. Down payment is usually described as a percentage of the total sale price.
Before you make an offer on any home, ensure you have calculated all buying costs. Talk with your mortgage broker or your buyers agent and inquire on CHMC, legal, property tax adjustments and closing costs. If you don't have a mortgage broker or bank mortgage specialist, ask us with your choice of bank or financial institution as we know some great people in that sector of the industry.
Mortgage lenders offer more attractive loan terms for borrowers with large down payments. Putting down 20% or more of a home’s purchase price will avoid mortgage insurance, also known as CHMC and offer the most attractive interest rates. As the down payment percentage goes down, the lender is at greater risk if they have to foreclose on the property, so they offer less attractive loan terms and higher interest rates.