Buying a home with no money down!

Dated: February 21 2020

Views: 53

 

Many Canadians are not aware that zero down is alive and well and offered by a handful of excellent lenders to qualified borrowers. Of course, you have to wonder if zero-down can possibly make good financial sense. The answer is both yes and no.

A zero-down mortgage is not for everyone – but for well qualified homebuyers, a zero-down plan can get them into their homes faster, saving potentially thousands in rent, and providing a jump start on building wealth.

If you have excellent income and credit, and the ability to manage your mortgage payment and ongoing housing expenses comfortably within your budget, then you could be a candidate for a zero-down mortgage.  Consider that the money currently going to rent could be helping you build home equity right now, and that we continue to be in a period of historically low interest rates.

So how can you get around saving that critical minimum downpayment required to qualify for an insured mortgage? You can borrow the downpayment from a line of credit, a personal loan, a family member or one of the programs offered by mortgage insurance companies such as CMHC or Genworth. 

In 2019, CMHC announced a new program, First Time Buyers Incentive, that loans the 5% downpayment, interest free for periods of upto 25 years for those who have combined family income under $120,000 and a looking to buy a home under $450,000. For more detailed information, click HERE.

Genworth, offers a Borrowed Down Payment Program for purchases under $1,000,000 and loans 5%-10% downpayment on new construction and resale homes. Borrowers must meet income and credit score requirements to apply. For more information click HERE

With excellent credit and stable income, your interest rate will be fully discounted. The loan payment of course will be used in your qualifying calculation, and your mortgage insurance premium will be higher. 

You’ll also need to have funds set aside to cover your closing costs such as legal fees, property transfer tax, and GST. However, there are programs available to help reducet the burden on first time buyers. 

BC offers exemption on Property Transfer Tax on properties valued under $500,000 and a discounted rate on values upto $525,000 for first time buyers on personal residence. For more information, click HERE.

CMHC offers a GST rebate up to $750,000 on new construction homes bought as a personal residence and upto $450,000 on homes bought as rental properties. 

Want to learn if you qualify to purchase now without waiting, how to build your downpayment faster, or the steps you can take to improve your credit rating so you qualify for a great rate when the time comes? Please call 604 318 2360 or email: listwithraph@gmail.com

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Raphael Johnpierre

Raphael is an excellent listener and a passionate people person. Raphael loves Real Estate and the opportunity it provides to connect with all different kinds of people and resources. An extrovert an....

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