In case you missed the new update back in December, we wanted to offer a friendly reminder that the rule changes for down payment on a home purchase will take effect on February 15, 2016. Here is the outline of the changes taking place:
The minimum down payment on new insured mortgages after February 15, 2016 will remain at 5% for the first $500,000 of the purchase price and 10% for the portion over $500k.
Example: $750,000 purchase price. 5% on the first $500,000 = $25,000. 10% on the additional $250,000 = $25,000. Total Down Payment = $50,000
|Purchase Price||Minimum Down Payment|
|Up to $500,000||5% Minimum|
|$500,001 to $999,999||10% Minimum (5% on the first $500,000)|
|$1 Million||20% Minimum|
On purchases above $1 Million to minimum down payment required will still be 20 percent. There is no down payment rule change on this amount.
Once again, these changes shouldn’t impact you too much. However, if you are planning to purchase over $500,000 with 5% down and don’t have your mortgage approved by February 15th the you will be subject to the rule changes. If you need further clarification or have any questions on how this impacts you, feel free to contact us.
VERICO The Financial Forum Ltd.
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