Posted on
August 1, 2023
by
Nina Djuric
What is a down payment and how much of a downpayment do I need to purchase a home?
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. The goal is to have a 20% downpayment (20% of the purchase price) so that you don’t have to pay for mortgage insurance which can be costly.
General guideline:
5% on $500,000 or less
10% for the portion of the purchase price above $500,000 up to $999,999
20% on $1,000,000 or more
What can I afford?
You will need to contact a mortgage broker to figure out how much of a mortgage a lender will loan to you. In the meantime, you can play around with the mortgage calculator on my website.
How much will I pay for closing costs?
It depends on the home, however, a good rule of thumb is 2-4% of the final home price.
What is property transfer tax (PTT)?
It is a tax you must pay when you buy a home in BC unless you are exempt. Click here to see the first-time buyer exemption guideline. The general PTT rate is 1% of the purchase price up to and including $200K; 2% of the purchase price over $200K+ and including $2 million. And 3% of the purchase price for over $2 million+
Should I get a pre-approval before house hunting?
Yes, 100%. This is crucial so that you can stay within budget and avoid any disappointments during the house purchasing process. It can already be stressful - don’t let the numbers be too.
Do I really need a buyer’s agent?
Absolutely! Not only is it a free service for you - we offer consumer protection when it comes to drafting up the contract. We also offer industry resources and information as well as comparable market analysis and real estate advice so that you can make the best financial decision for one of the biggest investments of your life. Stay protected!
How many homes should I view before putting in an offer to purchase?
When it feels right! Take your time in deciding if the home is right for you. I have had buyers who wrote on the first home and those who needed to see more. Most times all your boxes for needs/wants won’t all be met so it is important to decide what is really a need and a want. Location can’t change but your kitchen cabinets can!
Who signs the contract of purchase and sale?
The contract of purchase and sale is a contract for the sellers and the buyers. The buyers signing will also be on the mortgage/financing and who will have legal ownership over the home.
What is a deposit?
A deposit is good faith money that is put down by the buyer upon a firm agreement of purchase and sale of a home. This is your way of saying “you are serious” to the seller. The amount is typically 5% of the purchase price and forms part of your downpayment.
*This is extremely important to remember if you are still needing to sell your current home!
Will home prices continue to go down?
No one has a crystal ball to give you a definitive answer, however, we do have tools and predictions on what we think might happen. There are too many factors to consider. Prices may go down a little bit more, but that shouldn’t be too daunting if you are holding your real estate long-term. Real estate is cyclical and what goes up, goes back down and vice versa. The most important thing to focus on is finding a wonderful deal and sit back while home prices start appreciating again.
Is now a good time to buy a house?
The market is ever-changing, even the most informed experts can’t predict when the market will peak or fall. If you are purchasing a home for a long-term investment or enjoyment, you should be protected from short-term changes in the market. Instead, focus on picking a home that fits you and/or your family’s needs. In our current market conditions, there are deals to be made!
Please reach out with any questions. I encourage discussions on all things real estate. Happy to help, happy to educate!
Don’t miss out on any important real estate news, tips, advice, and investment opportunities by signing up for my complimentary #SOLDWITHNINA Newsletter.
Chat soon,
Your local real estate agent, Nina
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.