Author Topic: How much cash should I have to buy a house - Ontario - Canada?  (Read 4249 times)

findingoptimal

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How much cash should I have to buy a house - Ontario - Canada?
« on: September 22, 2013, 01:43:24 PM »
Hello,

I currently own a condo in Toronto, Ontario, Canada. It's not entirely paid off. My wife and I are looking to move to a house, in the suburbs. The house will likely be $550k or thereabouts. I have enough equity in the condo, that if we were to sell it and buy the house, then we would easily have more than the 20% required to avoid mortgage insurance.

Right now, we are stockpiling cash.

How much cash do you need when doing a house purchase? I'm not talking about equity, but actual cash cash?

I know we'll have to put down a deposit, pay land transfer taxes, moving costs, real estate lawyer, etc. out of cash, but is that it? Anyone have any guidelines on how much cash is required? Do people really have enough cash for deposit, and transfer taxes? For a $550k place, outside of Toronto that would work out to around $45k.

I'd like to avoid holding more in cash than is really necessary.

Thank you fellow Mustachians.

Spudd

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Re: How much cash should I have to buy a house - Ontario - Canada?
« Reply #1 on: September 22, 2013, 04:33:26 PM »
You are correct, you don't need the downpayment in cash cash - it can be from the equity which will turn into cash on closing day. As long as the closing dates are the same or you close on the condo first. If you will have some overlap where you own both at the same time, you'll need to talk to the bank about a bridge loan.

I don't remember how much deposit we had to put down, maybe 5k? I think the real estate lawyer is around 2k.

Matt K

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Re: How much cash should I have to buy a house - Ontario - Canada?
« Reply #2 on: September 23, 2013, 05:57:23 AM »
When we bought our house, the rule of thumb was 3% of the house value for various things - lawyers, land transfer tax, fresh paint, and things your house will need that you don't have (such as a water hose and garbage bins). Toronto upsets that number a bit, because your house values are so high. I'm guessing $550k doesn't buy you a McMansion in the TO 'burbs - In Vancouver it barely buys you a townhouse.

We spent pretty close to $8k on a $300k house a few years back.
« Last Edit: September 25, 2013, 06:44:51 AM by Matt K »

findingoptimal

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Re: How much cash should I have to buy a house - Ontario - Canada?
« Reply #3 on: September 24, 2013, 05:51:02 PM »
Hi, $450-550 should buy a nice 3 bedroom place in the burbs... hopefully!

3%, thanks for some guidelines. I think we'll keep a bit more than that, but nothing crazy onhand.

Mega

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Re: How much cash should I have to buy a house - Ontario - Canada?
« Reply #4 on: September 25, 2013, 10:11:05 AM »
It depends on the order in which you sell your condo. How many months of overlap will you have between the two abodes (paying 2 mortgages)?

Deposit standard is 5k.

Home inspection 1k ish

Landtransfer is 2% (in Toronto)

Welcome to the forums.