4. Spending Their Down Payment
It seems silly, but this is a predicament in which many homebuyers find themselves. In Canada, homebuyers are required to provide a minimum of a 20 per cent down payment for an uninsured mortgage, and a minimum of a five per cent needed for an insured mortgage. Insured mortgages are very common, and allow for people to take ownership of a home sooner than they might have been able to. Mortgage insurance is provided through three national providers: Canadian Mortgage & Housing Corporation (CMHC), Genworth & Canada Guaranty
Don’t forget that you must provide the complete amount of your agreed-upon down payment at closing time. If you have dug into your down payment savings to help cover other expenses, ensure you have the amount replenished before closing, and that you will not need to incur any debt to do so.
A tip for not spending your down payment is to open a separate savings account that you are unable to draw from. There are several high-interest savings accounts of this type you can take advantage of, and make sure to funnel your extra funds there first. You’ll be surprised how quickly it will add up!
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