Posted on: 01-06-12 02:04:39
Hi guys,
Can i buy brand new freehold townhouse on 5% down? Denial new homes will be coming next month.
Any idea how to book home. I heard people line up since morning. What is the procedure. What the really need. What should i take with me.
If I like the house what are the other expenses , fee or tax on new home. I am first time home buyer.
Pls. Guide me.
Thank in advance.
Quote:
Originally posted by adnancanada
Can i buy brand new freehold townhouse on 5% down? Denial new homes will be coming next month.
Thank in advance.
Yes you can since it is your first home. But get the pre-approval from couple of banks/mortgage brokers asap the rules might change anytime
Quote:
Originally posted by adnancanada
Any idea how to book home. I heard people line up since morning. What is the procedure. What the really need. What should i take with me.
Daniel? Good luck with it..you need really a lot of patience and time..
1) Register to Daniel Site for this location
2) The moment you get the email giving the advance notice of 2 weeks when they will open the toenhomes, rush to their sales center and tell them that you are interested in buying. And then depending on volunteers and some system you will be given a number and you have to attend the role call every 3 hour or whatever system they follow.. little tricky but you will get it once you visit the sales center.
Quote:
Originally posted by adnancanada
If I like the house what are the other expenses , fee or tax on new home. I am first time home buyer.
With 5% down,
1) CMHC fees
2) Appliances and blinds
3) Since you are buying from builder, you may not have to pay land transfer tax..but other closing cost depending on purchase price...could range about 3K to 5K
4) monthly expenses such as gas, hydro, water, maintainance fees, insurance, property tax..etc could be aroun $300-$500/month depending on size of townhome.
Good luck!
BTW: some of the folks would say: "5% down??? Are you insane??? Paying CMHC fees and other things?? that too in this economy? And when there is huge bubble in housing..dont do it.." but upto you have to decide if you can afford monthly installment and other expenses..if you can ignore above questions.
Hi Adnan,
Mr. Bhootnath has explained in quite details and answered most of your questions.
I would like to add / explain some more points.
1. Even though you can buy with 5% down, it would be better if you could put more in down payment to save on CMHC fees.
For example, if you buy the town house for $300,000 and put 5% down payment and take 30 year amortization, you would have to pay $8407.50 in CNHC feees and over $672 in PST. However, if you put 10% down for the same townhouse, the CMHC fee would be $5940 and the PST would be $475. Moreover, you would have lower monthly mortgage payments as well.
On a lighter note, people can buy even with ZERO down payment but end up paying higher CMHC fees and much higher mortgage rates.
2. Being a qualified first time home buyer, whether new or resale, you would be able to get rebate on Land Transfer Tax but it would be only up to a maximum of $2,000 rebate from Ministry of Finance. Here I am considering that you are in Ontario as you have not mentioned your place of residence. However, if you buy the townhouse in Toronto, then their is addition land transfer tax and rebate up to a maximum of $3,750 for qualified first time home buyers. For all details on these taxes and rebates, visit these http://www.fin.gov.on.ca/en/tax/ltt/faq.html , http://www.fin.gov.on.ca/en/bulletins/ltt/1_2008.html , http://www.toronto.ca/taxes/mltt.htm
3. The builder may ask you to produce a pre approval for the mortgage for booking the townhouse, so it would be better to get yourself approved first before heading to the builder. Also, it would let you know how much you can qualify for and lock the rate as well.
Last but not the least, it would be a good idea to see a mortgage professional from your bank or the one referred by your family and friends who will take time to understand your needs and explain the whole process to you to make your first home buying experience an enjoyable one.
Good Luck.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
