A "message" from Message - What is the minimum down payment needed to buy a home?
Mortgages with less than 25% down must have Mortgage Loan Insurance provided by either the Canadian Mortgage and Housing Corporation (CMHC)or Genworth Canada.
While most Canadian homebuyers save for a down payment, with selected lenders the minimum five per cent of the purchase price can come from sources other than your own resources. These lending arrangements are subject to certain restrictions based on income level and credit score.
The 5% down payment can come from borrowed funds (from a line of credit or family member, for example). Keep in mind that the amount borrowed for a down payment is factored into debt service ratios (which determine how much you are eligible to borrow).
The 5% down payment can come from a cash back feature of the mortgage. Keep in mind that in this case, the posted rate (that is, an undiscounted rate) will be required by the lending institution. This would be the equivalent to a Zero Down Payment type of purchase.
In addition to the down payment, according to CMHC and Genworth rules you must have 1.5% of the purchase price available to cover the applicable closing costs (including, but not limited to, legal fees and disbursements, appraisal fees and a survey certificate, where applicable).
For further details: www.pre-approval.biz/
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Hugh Message - www.HughMessage.com
Macdonald Realty 1st Pioneer,
22424 Fraser Highway, Langley, BC V3A 8N3
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