Are you selling and buying a new home and need to come up with a deposit on the new home?
When you purchase a home, the sellers will generally require a deposit on the home your buying for around 5% of the purchase price (some go as high as 20% of the purchase price). But if you’re like a lot of us, having access to that kind of large cash on short notice it tough if not impossible. Especially if all of your equity is sitting in a house that is waiting to sell.
There are several ways to get a deposit together when you’re buying a home:
- Borrow the funds from a friend / family member
- Borrow the funds from your financial institution / lender through an unsecured LOC (line-of-credit) or short term personal loan.
- Put an open mortgage on your existing home until it sells
- Get deposit financing (a loan through a company who specializes in providing deposit financing)
- Use your credit cards
The cheapest and easiest for sure is borrowing the funds from a friend / family member as there’s usually not the regular qualification rules and costs associated with borrowing the funds from a financial institution.
The second cheapest option is borrowing the funds through an unsecured LOC or personal loan through a financial institution. Sometimes the amount you need might be too high on an unsecured basis, so that leaves the next best option and that’s to get a deposit financing loan.
Deposit financing is for people that have a firm offer on their existing home and simply don’t have the funds available for the deposit on the new home they’re wanting to buy. The amount you borrow will be paid off with the sale of your home and these specialty lenders will offer up to $100,000 on an unsecured basis (OAC).
We have exclusive access to a company providing deposit loans so if you’ve sold your home but the sale hasn’t closed yet and you need to arrange for your deposit on a new home, give us a call. We can get you pre-approved for the deposit loan up-front so that you won’t have any surprizes once you find your dream home and want to make your offer.
Ph: 604-313-3199 / firstname.lastname@example.org.