Stop helping your landlord become mortgage free. There are several lenders who will offer the possibility of purchasing your home with zero down.
Financing your 5% Down Payment
Home buyers can purchase their home with as little as 5% down. The 5% down program was initially set up for qualified First Time Home Buyers but since has been made available to everyone, even repeat buyers, providing they meet the program criteria. There are lenders who will finance up to 95% of your purchase and provide cash back of 5%, which you can then use as a down payment.
Borrowing your Down Payment
Recent changes in Canada Mortgage and Housing Corporation (“CMHC”) and Genworth Financial (“Genworth”) guidelines now make it possible to borrow your down payment as long as you still are able to meet the lender’s debt servicing guidelines. This has opened up home ownership possibilities to virtually everyone.
All mortgages that are above 75% of the purchase price must be insured with mortgage insurance as regulated by Canada’s Bank Act. The main insurers are CMHC and Genworth. The size of your premium will depend on the loan-to-value ratio borrowed, the larger the downpayment, the smaller the premium. The premium for having a downpayment that is between 5% and less than 10% is only 2.9%. If the downpayment is borrowed, the premium is slightly higher. This insurance premium being charged can be added to the mortgage and paid over time.
The maximum purchase price eligible for this program was at one time restricted. Now, the maximum purchase price for borrowers with 5% down or more is unlimited.
Credit Issues and No Down Payment Mortgage Products
Although 100% financing is mostly reserved for the A+ credit population, there are lenders who will allow people with slow or bruised credit to take advantage of this opportunity as well. CMHC and Genworth will not consider guarantors to mitigate the borrower’s risk.