Deposit & Down Payment: What's the Difference? - The ...

Once you have paid the deposit and the offer is in, it's time to look to the next phrase, the down payment. The down payment is the amount of money you put ... Skiptocontent GetAnIn-HomeEvaluation Yourname*Youremailaddress* YourphonenumberYouraddress*ShareanydetailsimportanttoyourhomeConsentIconsenttoreceivingemailcommunicationsfromWoolcottRealEstate|eXpRealty,BrokeragePhoneThisfieldisforvalidationpurposesandshouldbeleftunchanged. FindOutNow Δ Between9amand9pm,wealwayshaveanagentonhandtoansweryourcalls(oftenwithin5–10minutes).Ourdedicatedagentsareproudtobepartofourvibrantcommunityandarewellversedinthelocalmarket. What’sYourHome’sValue? Ourteamismadeupoflocalmarketexperts,equippedtohelpprovideahomeevaluationinyourhomeoryourinbox.Between9amand9pm,wealwayshaveanagentonhand(oftenrespondingwithin5–10minutes).Let’stalkaboutyourhometoday. CallUsNow RectangleCreatedwithSketch. Youfinallyhaveyourdreamhomeandyouaregoingtomakeanofferwhenyouseetheword“deposit”ononthepaperwork.Didnotyoudiscussthiswithyourmortgagebrokerwhentryingtodetermineyour“downpayment”? Theanswerisno–depositsanddownpaymentsaretwoverydifferentthingstoconsiderinanyrealestatetransaction.Nowonderitcanbeconfusing! Althoughbothrequiresaving,theyoccuratdifferenttimesduringthetransaction.Let’slookatwhatthesetermsmeanandwhatyouneedtoknow.   Deposit Ifyoubidonaproperty,adepositisexpectedtoshowhowseriousaboutthepropertyare.Similartoarentaldeposit,itshowsthatthisistheplaceyouwanttolive. Depositsareusuallyintheformofabanktransferorcertifiedcheck.Thedepositamountisdecidedbetweenyouandyourrealtorandreallydependsonthelocalpropertymarket.Expectthedeposittobebetweenoneandfivepercentofthepurchaseprice. Iftheofferisaccepted,thedepositislikelytobeheldintrustbythelistingbrokeragent.Thisoffersyoubuyerprotectionifthesellergoesbankrupt.Itisalsoprotectedbytheinsurancecompany,soeveniftheagencygoesbankrupt,youcangetyourmoneyback. Aquestionoftenarises,canthebuyercangetthedepositbackifthereisaproblemwiththefulfillmentoftheconditionsorifthebuyerdoesnotwanttogoaheadwiththepurchase.Thereisnosimpleanswertothis,aseverysituationisdifferent.However,thedepositcannotbereleaseduntilbothpartiesagree.Ifaconditionisnotmet,thesellermayrefusetoreleasethedepositiftheybelievethebuyerisnotactingingoodfaith. Anotherthingtoconsideristhatnotpayingthedepositdoesn’tmakethedealnullandvoid.Ifthesellerchoosestosellthehousetosomeoneelseandnotbeabletogetthesamepurchaseprice,youcanbesuedforthedifferenceandthecostoflegalfees. DownPayment Onceyouhavepaidthedepositandtheofferisin,it’stimetolooktothenextphrase,thedownpayment.Thedownpaymentistheamountofmoneyyouputtowardsthepurchaseprice,totakeasmallerloan.Thisiswherethesavingsreallycomesintoplaywhichcanhelpyoupayalowermortgagerate! InCanada,youhavetoputdownaminimumof5percentofthepurchaseprice.Forexample,ifyouboughtahousefor$400,000,youwouldhavetoputatleast$20,000.However,ifyouwanttoavoidmortgagedefaultinsuranceyouwanttopayatleast20%($80,000inthiscase).Supposeyoupay20percent,yourpaymentwillbedeductedfromthepurchaseprice,andwhatisleftistheamountyouneedtofinancewithyourbank.Forexample:$400,000(purchaseprice)–$80,000(downpayment)=$320,000(mortgageloanamount). Summary Inshort,thedownpaymentisthemoneyyougivethesellertoacceptanofferandtoshowthatyouaremotivatedandseriousaboutthedeal.Thedownpaymentistheamountofmoneyyouputdownonthemortgage–whichhastobeatleastfivepercentofthepurchaseprice. Ifyouhaveanyquestions,pleaseleaveacommentorgiveusacallat905-689-9223andoneofoursalesrepresentativeswouldbemorethanhappytogothroughthiswithyou! LeaveaReplyCancelreplyYouremailaddresswillnotbepublished.Requiredfieldsaremarked*CommentName* Email* Website Δ RelatedPosts 01.8.16|BuyingaHome ThankyouforhelpingusprotecttheCanadianDream ThankyouforhelpingusprotecttheCanadianDreamOnDecember1,2015,theGovernmentofOntarioannouncedthatit... LearnMore 01.17.19|BuyingaHome WhatHappensWhenYourOfferisinCompetition? You’vebeenhousehuntingforweekswhenyoucomeacrossahomethat’sbeenlistedforacoupleofmonths.... LearnMore 03.3.15|Burlington HelloMarch! It’sofficial–Februaryisover,whichmeanswecanfinallysaygoodbyetoamonththatcertainlyfeltinfinitely... LearnMore CategoriesCategories SelectCategory Agents Announcements Burlington Buying BuyingaHome CurbAppeal Downsizing Events eXpRealty FinancialPreparation ForAgents Hamilton HomeImprovements&Renovations HomeInspections Homeowners InteriorDesign Leasing Lifestyle MarketUpdates MortgageStressTest Moving OpenHouses Pre-Construction RealEstateAgents Selling SellingyourHome Staging ThingsToDo TOOLATE® Waterdown