I have been receiving a lot of questions regarding the new down payment rules. Several clients have asked me to explain the math that is behind it, the dates of these rules change and how it will effect them. I have decided to write a blog entry to outline all the information as watching a video that would discus this many numbers would make me dizzy. Anyhow, I hope after reading this all your questions will be answered, and if not, there is a comment box at the bottom so please feel free to send me a quick note and I will do my best to answer it. I will edit this post as well with any questions that are asked.
When do these new rules start?
Soon! In order to qualify for the “old” down payment rules you must have firm paper work on a home BEFORE February 14th 2016 and close before July 1st, 2016. This means that anything that does not follow those dates, you will be subject to the new rules.
Do these rules only apply to first time home buyers?
No, they apply to anyone purchasing a home over $500,000. First time home buyers may be effected the most though, as they do not have a property to sell, which is where most buyers who buy over $500,000 get their down payment from.
If I put down more than 10% of the purchase price of the home, do I still have to pay more?
No, 10% is more than the minimum down payment amount is needed for a down payment so nothing will change.
Below we have a chart explaining the dollar figures of the new minimums allowed to purchase a home over $500,000.
|
Purchase Price |
Old Down Payment Required | New Down Payment Required |
Monthly Payment |
|
$500,000 |
$25,000 | $25,000 |
$1,900 |
|
$600,000 |
$30,000 | $35,000 |
$2,259 |
|
$700,000 |
$35,000 | $45,000 |
$2,619 |
|
$800,000 |
$40,000 | $55,000 |
$2,979 |
| $900,000 | $45,000 | $65,000 |
$3,338 |
* Down Payments are minimum needed for the purchase price
**Monthly Payments based on 30-year mortgage at 2.59% Interest.
I hope you have found this information helpful. If you have any questions, please feel free to send me an email at Mike@LCRealEstate.ca or comment below this post in the comment box and I will be sure to answer you. Thank you for reading.
Take Care,
Mike Elsey
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