{"id":6906,"date":"2025-07-18T13:35:42","date_gmt":"2025-07-18T13:35:42","guid":{"rendered":"https:\/\/www.geranium.com\/blog\/?p=6906"},"modified":"2025-07-18T15:18:51","modified_gmt":"2025-07-18T15:18:51","slug":"homebuying-terms","status":"publish","type":"post","link":"https:\/\/www.geranium.com\/blog\/homebuying-terms\/","title":{"rendered":"Essential Homebuying Terms Every New Homebuyer Should Know"},"content":{"rendered":"
\"\"

New homeowners at Midhurst Valley.<\/a><\/p><\/div>\n

Buying a new home, whether it\u2019s move-in ready<\/a> or pre-construction<\/a>, is an exciting step, but it can also feel overwhelming, especially with so many unfamiliar terms and processes. We understand how daunting it can be, so we\u2019ve put together a simple guide<\/strong> to help you get familiar with the must-know terms. A little knowledge can go a long way in helping you feel more confident, informed, and ready for what\u2019s ahead.<\/p>\n

Pre-Approval<\/strong>
\nGetting pre-approved for a mortgage<\/a> is an important first step. A lender will review your finances to determine how much you can afford and how much you\u2019re eligible to borrow. This helps set a clear budget and shows sellers you\u2019re a serious buyer.<\/p>\n

Mortgage Rates & Terms<\/strong>
\nRates:<\/strong> When choosing a mortgage, you\u2019ll decide between a fixed or variable interest rate. A fixed rate<\/em> stays the same throughout your term (commonly 5 years), providing predictable payments. A variable rate<\/em> can fluctuate with the Bank of Canada\u2019s rates, meaning your payments may go up or down.
\nTerms:<\/strong> Mortgage terms can vary widely from just a few months to 5 years or longer. Most Canadian homeowners opt for a short-term mortgage<\/em> (5 years or less), while a long-term mortgage<\/em> exceeds 5 years. There\u2019s also the option of a convertible term mortgage<\/em>, a short-term mortgage that your lender can convert into a long-term one if needed.
\nGet more details here<\/a>.<\/p>\n

\"\"

Get familiar with the must-know terms and feel confident about your next steps.<\/p><\/div>\n

Down Payment vs Deposit<\/strong>
\nA deposit<\/strong> is a sum of money that is paid upfront after your offer to purchase a home is accepted. It forms part of the overall down payment, secures the sale and shows commitment. The full deposit schedule is included in your contract.<\/p>\n

The down paymen<\/strong>t is the amount you contribute upfront<\/a> toward the purchase price. The minimum amount you need for your down payment depends on the purchase price of the home.
\nMinimum Down Payment Requirements in Canada:
\n$500,000 or less: 5% of the purchase price
\n$500,000\u2013$1.5 million: 5% on the first $500,000 + 10% on the remainder
\nOver $1.5 million: 20% of the purchase price
\nNote: If your down payment is less than 20%, mortgage loan insurance<\/a> is usually required.<\/em><\/p>\n

Agreement of Purchase and Sale (APS)<\/strong>
\nThis contract outlines the price, payment terms, closing date, and what\u2019s included in the home. Always review it with a real estate lawyer before signing.<\/p>\n

Buying Pre-Construction vs. Move-In Ready<\/strong>
\nBuying pre-construction<\/a> means purchasing before the home is built. You can choose your lot, layout, and finishes, then move in once everything is complete. It\u2019s a great option if you need time to arrange financing or sell your current home. Pre-construction offers flexibility and the personalization today\u2019s buyers are looking for. Explore opportunities at Courts of King’s Bay<\/a> or Allegro Aurora<\/a> to see if a pre-construction home is right for you.<\/p>\n

Prefer not to wait? Take a look at move-in ready<\/a> homes at Midhurst Valley<\/a> or Clarehaven Estates<\/a>. These newly built, fully finished homes are ideal if you\u2019re eager to settle in quickly. You can tour the actual home, know exactly what you\u2019re getting, and enjoy the convenience of a faster closing.<\/p>\n

Both options offer the benefits of a brand-new home, without the need for renovations or repairs, it really comes down to your timeline, preferences, and priorities.<\/p>\n

\"\"

Buying a move-in ready<\/a> home means you can move in quickly, while enjoying all the benefits of new construction.<\/p><\/div>\n

Types of Ownership<\/strong>
\nWhen buying a new home, it\u2019s important to understand the different types of ownership.
\nFreehold Ownership<\/em> means you own both the home and the land it sits on. You\u2019re fully responsible for maintenance, but you also have the freedom to personalize your property: adding your own fencing, landscaping, or outdoor features without needing approval.
\nCondominium Ownership<\/em> includes ownership of your individual unit, while shared spaces, like hallways, lobbies, or green areas, are considered common elements and maintained collectively through monthly condo fees.
\nCommon Element Condominiums<\/em> are a hybrid, where you own your freehold home but share ownership of certain amenities or areas, like private roads, parks, or driveways, with other homeowners.<\/p>\n

Builder Upgrades<\/strong>
\nMany new homes come with standard finishes. You can upgrade<\/a> items like flooring, cabinets, or lighting for an added cost. Ask for an upgrade price list and confirm what\u2019s included in the base price.<\/p>\n

\"\"

Personalize your Allegro home<\/a> with fabulous upgrades.<\/p><\/div>\n

Closing Costs<\/strong>
\nIn addition to your down payment, expect to budget 1.5%\u20134% of the home\u2019s price for things like:<\/p>\n