This assignment involves a comprehensive assessment of the costs associated with the acquisition of a residential property, factoring in the ongoing mortgage expenses. Assume an inheritance of $150,000.00 as the financial foundation for contributing to all closing expenses and the down payment. The full amount of $150,000 should be utilized for the purpose of this assessment.
- Begin by conducting an online search for a house or condominium that you intend to purchase. For the purposes of this assignment, the chosen property must be located in Ontario. Attach a screenshot displaying the property’s price, description, and precise location. Please avoid sharing links, as they become inactive once a property is sold. (5 marks)
- Proceed to calculate the aggregate closing costs required to finalize the purchase of your selected property. Construct a table that itemizes these costs along with a summation. You may estimate some costs, except for land transfer taxes, which should be calculated using the following link: https://www.ratehub.ca/land-transfer-tax. Focus on recognizing the various expenses associated with closing a real estate transaction. (15 marks)
- Deduct the closing costs calculated in #2 from the $150,000.00 inheritance to ascertain the available amount for the down payment. (5 marks)
- Using your down payment amount, calculate the necessary mortgage amount to facilitate the purchase of the selected property. (5 marks)
- Determine the monthly mortgage payment required, assuming a 25-year amortization period. Utilize the following resource for this calculation: https://tools.td.com/mortgage-payment-calculator/. Select any suitable interest rate from the options provided in the mortgage calculator. Ensure that you incorporate CMHC mortgage insurance if your down payment is less than 20% of the purchase price of the home. For CMHC calculations, refer to: https://www.ratehub.ca/mortgage-payment-calculator. Attach a screenshot reflecting the values used for the payment calculation. (10 marks)
- Compute the minimum annual salary required to qualify for the mortgage based on your Gross Debt Service (GDS) ratio. Presume annual property taxes to be 1.5% of the property’s value, and heating costs to be $150 per month. (15 marks)
- Presentation: 10 marks will be allocated towards the overall professionalism of your assignment. This encompasses aspects such as organization, spelling/grammar, structural coherence, formatting, readability, and the inclusion of proper references. Please ensure that references are provided in APA format.
