You may have heard of recent changes to down payment requirements as recently announced by the new Federal Government.
While it is true that the Government has increased the down payment requirement, it only applies to transactions exceeding $500,000.00.
Currently the minimum down payment required for a residential first home purchase is 5%. Starting in February 2016, if your purchase price is over $500,000.00 you will require 5% down on the first $500,000.00 and 10% down on the balance.
For example, if you purchase a home for $750,000.00 your down payment required today would be $37,500.00. Starting in February your required down payment would be $50,000.00. It would be calculated as follows:
5% down payment on $500,000.00 = $25,000.00
10% down payment on $250,000.00 = $25,000.00
For a total down payment of $50,000.00.
The average buyer in Norfolk County will not be affected by this change. Year to date the average sale price of a single family residential home is $259,716.00 as reported on the local Multiple Listing Service®. Therefore, the increased down payment requirement would not apply. The down payment would remain at 5% and be $12,985.80.
The number of year to date single family residential sales exceeding $500,000.00 on the local MLS® is 45; accounting for only 4% of sales in this category as reported on the local MLS®.
When it comes to choosing a mortgage there are lots of local professionals who can assist you in getting the right mortgage. If you’re looking to buy and for a mortgage, we have strong working relationships with many local lenders who can assist you.
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