These are some of THE most common terms which are confused in the Mortgage & Home buying process! Watch the video below for a quick breakdown and explanation below.
Alright, so here you go, the why, the how and a few other questions answered about picking a realtor
A deposit is the money which is given to the seller (and held by the Realtor "in trust") when a buyer has decided to FIRM up an offer on a property. This amount can very, however is commonly 3% to 5% of the purchase price. The deposit can come from sources such as, Savings, Line of Credit, Credit Card, Gift or a Deposit Loan.
This money is returned, or applied to the downpayment upon completion of the property. If the buyer does not complete the sale, the deposit is forfeited.
This is the total amount required for financing approval, the minimum downpayment is 5% to buy a property, 20% to buy an investment property and in come cases more. The total downpayment required depends on the borrowers qualifications and type of income. For example self employed, rental property etc.
Buyer has an offer accepted, the deposit amount of $20,000 is provided (from savings) upon signing an addendum removing the subjects of sale. In doing so this money is now held in trust until completion. The downpayment is $40,000, on completion the remaining $20,000 must be provided on completion to bring the total downpayment to $40,000.
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What To Do Next? 😎
- Reach out to us If you are THINKING about buying or Refinancing
- Send This Info & Video to everyone you know who is buying or selling or maybe refinancing Remember: they may be thinking of a refinance, investment property OR know a friend who is currently thinking of buying.
- Send them our way and we will give them an estimate of their before and after rule pre-qualification.
- Contact us early to get ahead of the game, even if your mortgage is not up for renewal until next year.
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