You need to have immediate access to about 5% of the
purchase price of your future home before you go out
on showings. Why? When you find a great home that
you want to buy, you put in the offer. Then when your
offer is accepted, you only have 24 hours to deliver
that deposit to the listing brokerage. So if your price
ceiling is $800k, you need to be able to have $40k
ready at hand. Caveat: if you bank with an online
company like Tangerine, it can take more than 24 hours
to deliver that deposit. Remember: preparation is key
because once you start seeing properties in person,
you want to feel ready and confident as things can
happen fast!
Deposit
Closing costs
When you’re looking at your finances and figuring
out your homebuying budget, make sure you plan
for your closing costs. You will be expected to
pay for these just before you take possession of
your home. The recommended amount to budget
for is 1.5-4% of the purchase price. For a great
calculator, go to www.welbanks.com/calculator .
Some costs include: the Land Transfer Tax (it’s
double in the Greater Toronto Area compared to
the rest of the province!), legal fees ($2,500 -
$3,000), appraisal ($300-$500), moving costs,
and adjustments.
FINANCIAL REVIEW AND PLANNING