5% Down Vs. 10% Down - A Comparison

It has always been an issue for home buyers to save their down payment. Many people, on advice from various people wait to save 10%, rather than moving into the home sooner with 5% as a down payment This is not always a good idea. Let me explain;

We have 2 young couples, the Jones' and the Smiths. They both have the same amount of money to spend on housing and saving ($1000/month). From that $1000, they are paying their rent of $750/month, and saving the other $250 for their down payment. In fact they're identical people.

The Jones' and the Smiths are both looking to buy a $100,000 property. As such, they will need $5000 as a down payment if they purchase at 5% down, or $10,000 if they wish to have 10% as a down payment.

To date, they have both saved $5000 with which to purchase a property. The Jones' have decided to buy now and accept that they only have 5% as a down payment The Smiths' have decided to wait until they can raise 10%; thus saving themselves some CMHC costs.

What the Smiths' aren't realizing is that while they wait, the cost of the property is increasing... thus incrasing the amount of money they need as a downpayment.

They've also not taken into account that the money they are paying in rent is being thrown away, while they could have been putting that against their mortgage.

Sure, saving the CMHC fees is a good idea. But is it necessarily the right way to go? Not always.

If it takes the Smiths an extra 2 years to save up the extra money, the property could have increased by as much as $15,000 in that time.... meaning that they'd need more of a down payment, as well as having a larger mortgage than if they'd bought earlier.

If you'd like to read this article in full, including graphs showing the difference between the Smith's and the Jones' then go to our website at www.workingtogether.ca and review the article titled "5% Down Vs. 10% Down - A Comparison". You'll get the idea; and possibly save yourself a lot of money!

About The Author

John Carle & Sharon Gregresh are Realtors with Royal LePage - ArTeam in St. Albert, AB. They pride themselves on providing more than just real estate sales and listings. Their clients benefit from a much larger spectrum or real estate services. Contact them any time at information@workingtogether.ca or through their website at www.workingtogether.ca They can be reached by phone at (780) 458-5595

---

Refinance Your Car Loan - 3 Tips For Refinancing Your Auto Loan Online

Refinancing your car loan is an ideal way to lower... Read More

Faxless Payday & Cash Advance Loans - Fast Cash, No Faxing Loans, The Easiest Payday Loan Process

If you are in a hurry for a payday loan,... Read More

Payday Loans - Ways to Keep Your Costs Low

Payday loans offer a fast and easy solution to financial... Read More

How to Finance a Small Business

Confused by how to finance a small business? One key... Read More

What is a Homeowner Loan?

A Homeowner Loan is a way of using the equity... Read More

Secured Personal Loans: Constructive Structuring for Financial Success

Credit relationships in a social system form an intricate web... Read More

A Guide to Common Loan Terms

Many people may wonder about common loan terms? words and... Read More

A Look at Common Types of Loans

People sometimes wonder about common types of loans, especially with... Read More

Wedding Loans Because Wedding May Be Made In Heaven But They Are Certainly Not Made For Free

Wedding loans because wedding may be made in heaven but... Read More

A Personal Loan And Your Rights

You can use a personal loan for many different things... Read More

A Look at the Origins of Online Lending

You might find yourself wondering about the origins of online... Read More

A Look at Getting a Bad Credit Personal Loan

Trying to get a bad credit personal loan can be... Read More

A General Discussion about Unsecured Personal Loans in the UK Financial Market

Personal loans are offered by lenders such as banks and... Read More

To Be Mr. and Mrs. Sometimes You Need Wedding Loans

The conception of wedding has changed over the years. Its... Read More

Cash Loans: The Good, the Bad, and the Debt-Free

Happiness is what they're selling. Relief from the crushing weight... Read More

A Brief Look at the Origins of Lending

When trying to discover the origins of lending you might... Read More

Giving Finances a Breather Through Loans for Unemployed

Martin graduated of the college with dreams of a highflying... Read More

Quickest Payday Loans - Things To Look For in a Cash Advance Company For The Fastest Loan Processing

To find the quickest payday loans, you need to look... Read More

Refinancing Your Auto Loan

Refinancing your loan is one of the best kept secrets... Read More

Debt Consolidation ? Watch out for Payday Loans

Most any large city has a number of small shops... Read More

Shopping for a Payday Loan

You wouldn't consider buying a new pair of shoes, a... Read More

Do Payday Loans Deserve a Bad Rap?

We have all heard the stories about cash advance lenders... Read More

A Borrowers Guide to Bad Credit Loans UK

If you find yourself in a situation where you need... Read More

Try Unsecured Loans! If The Word Secured Doesn?t Fit Your Financial Statement

Big financial goals, no security to supply - it is... Read More

Making Your Business Happen with a Commercial Lender

If your home business is starting to overflow from the... Read More

What is Credit Scoring?

Have you ever wondered what is credit scoring? Credit scoring... Read More

What is Bad Credit UK?

Bad credit UK is a term that many people don't... Read More

Payday Loans Available Even ToThose With Bad Credit

Bad credit payday loans may seem like an oxymoron phrase,... Read More

Guide to Personal Secured Loans

Here is a useful guide to personal secured loans. A... Read More

Financial Aid for College Students - Grants

The bad news about attending college is that it costs... Read More

Zero Zero Financing on Automobiles in Retrospect

Some say that the automobile industry saved the economy during... Read More

A Guide to Finding an Adverse Credit Homeowner Loan

If you're searching for an adverse credit homeowner loan, you... Read More

Why Bank Overdrafts May Be a Bad Deal For You

Many banks actively encourage their clients with low balances to... Read More