What is the Difference between Deposit and Down Payment?
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That amount it all depends on the purchase price and how quickly you will be closing on the sale. The deposit is applied against the purchase ... LogIn SignUp Buy Rent NEW Sell NewHomes Buildings FindanAgent Mortgages Blog Buy Rent NEW Sell NewHomes Buildings FindanAgent Mortgages Blog SignOut LogIn SignUp SignUp *FirstName *Email Password PasswordConfirmation Getthelatestmarketnewsandhomebuyingtips.Signupforourweeklynewsletter. (Unsubscribeanytime) LogIn *Email Password Stayloggedin ForgotPassword? ForgotPassword Email Buying&SellingTips RealEstateTrends CoolHomes AgentResources NewDevelopments RentingTips REWUpdates Lifestyle BacktoBlog REW REWBlog AsktheExpert:DifferencebetweenDepositandDownPayment? Whatisthedifferencebetweendepositanddownpaymentandatwhatpointintheprocessiseachpaid? Thedepositisthemoneythatyouputdowntosecurethepropertythatyouarepurchasingandthedownpaymentisthemoneythatyouputupfrontwhenyoupurchaseaproperty Thedepositisthemoneythatyouputdowntosecurethepropertythatyouarepurchasing,inotherwordsyouareprovingthatyouareseriousaboutbuyingtheproperty.Thereisnosetamountonhowmuchthedepositamountis.Whenyouarewritinganoffertopurchasewithyourrealestateagent,theywillrequireadepositamount.Thatamountitalldependsonthepurchasepriceandhowquicklyyouwillbeclosingonthesale.Thedepositisappliedagainstthepurchasepriceofthepropertywhenthesalecloses.Thedepositwillbecomepartofthedownpayment.Ifthesaledoesnotclose,thedepositislost. Thedownpaymentisthemoneythatyouputupfrontwhenyoupurchaseaproperty.Downpaymentstypicallyrangefrom5percentto20percentofthetotalvalueoftheproperty.Theminimumdownpaymentrequiredtopurchaseapropertyis5percent. Therearedifferentdownpaymentrequirementswhenyouarepurchasing.Ifyouareanemployee,youcanputaslittleas5percentdownpayment.Forself-employedindividualsitcanbeaslowas10percentandifyouarepurchasingarental/investmentpropertyyouwillneedtoputaminimumof20percentdownpayment.Thefullamountofthedownpaymentispayablewhenthesalecloses. Hereareacoupleofexamples: Example1: Thebuyersarebuyingapropertywithapurchasepriceof$500,000.Theywillbeputtinga10percentdownpayment($50,000).TheyremovesubjectsandtheofferbecomesafirmofferonJanuary27andtheywillbeclosingonMarch4.Theyimmediatelypayadepositof$25,000tosecuretheproperty.Thebuyerswillneedtopaythebalanceofthedownpaymentontheclosingdate,another$25,000,foratotaldownpaymentof$50,000. Example2: Thebuyersarebuyingapropertythatisunderconstructionandthedeveloperisaskingfora10percentdeposit.Thepropertythattheyarepurchasingis$619,900plusGST.Theyhavegivenadepositof$61,990.ThefinalpurchasepricewithGSTis$650,895.However,thebuyersareonlyputtingdownadownpaymentof5percent($32,544.75).Therefore,thebuyerswillgetbackthedifferenceonclosing. Likethisarticle?Subscribetoournewsletterandyou'llnevermissastory. JorgeandAlisaAragonaremortgageandleasingexpertswithDominionLendingCentresMountainView.TheyareactivemembersoftheGreaterVancouverHomeBuildersAssociation.JorgeandAlisafocusontheoverallneedsandplansoftheirclientandthenfindthebestmortgagetosuittheirneeds. PrevArticle Inpartthreeofourseries,welookatGrandviewEast–homeofTroutLake,TheCultchand,... Buying&SellingTips Jan26,2015 NextArticle Inpartthreeofourseries,welookatGrandviewEast–homeofTroutLake,TheCultchand,... Buying&SellingTips Jan26,2015 TrendingArticles ShareTheJoyOfGivingDuringGrosvenorAmericas’HolidaysOnTheBlockEvents HowtoFindtheBestMortgageDealinCanada? HowtoBuyaPresaleCondo:Mortgages,Deposits,andDevelopers,Explained ThinkingofBuyingaLeaseholdProperty?ReadThisFirst FAQs:WhatYouNeedtoKnowaboutSubjectRemoval Subscribetoournewsletterandgettheweek'stoprealestatenewsdeliveredtoyourinbox. *Email I'marealestateagent FollowREW Subscribetoournewsletterandgettheweek'stoprealestatenewsdeliveredtoyourinbox. *Email I'marealestateagent Success You'vesubscribedtoourblognewsletter. Close
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