The dream of owning a home won’t be possible if you don’t have a proper financial plan in the Toronto real estate market. Certainly, buying a home, especially for first-time buyers, is one of the biggest investments in your life. So, first of all you need to decide whether you afford to buy a condo or not. One of the most important items to consider, when you decide to buy a condo as an investment or residence, is paying a downpayment for a condo.
Here, as a Toronto real estate agent, I will inform you about the important tips related to condo downpayment.
If you are a first time-buyer, you will get the insured mortgages and the average downpayment would be 10% for you. But if you are an investor, you should pay 20% for condo down payment. When you are planning for this big purchase, remember that buying a condo is not just about downpayment and mortgage.
Do you know how much it costs to buy a condo in Toronto? There are other costs you must consider, including your real estate agent commission, land transfer tax, packing and moving, etc. So, don’t start the condo buying process unless you are completely knowledgeable.
A downpayment is simply the part of a condo’s purchase price and you should pay upfront in order to secure the amount that you borrowed. The amount that you make as a downpayment gets deducted from the total mortgage price of your condo. Then the remaining amount would be covered by the mortgage loan, which completely depends on your financial status.
Certainly not everyone can afford to pay $ 100-200 thousand for downpayment. There are several ways to pay for it. Be creative and find a way to put together the downpayment for your first condo. You can even use your Stocks in your Tax Free Savings Account for downpayment, but the first and easiest way is your personal savings. You can keep your money in savings accounts to grow and then use it to become a homeowner.
The next way for the first time buyers is using their RRSP. According to the Federal Government Home Buyers’ Plan (HBP), this program allows you to withdraw from your registered retirement savings plans (RRSPs) to buy or build a home for yourself. You can use it to pay your condo downpayment. Besides, if you are a couple you can use up to $70,000 of your RRSP.
