Of all the challenges that first time home buyers face, one of the most common is down payment.
Here in Canada, the minimum down payment required for the purchase of a home for you to live in is 5% of the total purchase price.
Coming up with multiple thousands of dollars in down payment funds to purchase your first home requires diligence to saving money that does not always come naturally to all people. This is especially difficult when these first-time home buyers are out living on their own paying rent and utility bills.
Up until a few years ago zero down mortgages were widely available. Over that last 15 years the mortgage industry went through significant change in the wake of the US Mortgage Crisis. Zero down mortgages was one of the products that was eliminated.
Even though zero down mortgages are no longer available, you can still get a mortgage for the purchase of a home without the down payment under the Flex Down or Borrowed Down Payment Programs. These mortgage products allow you to borrow your 5% down payment from a loan or line of credit.
These Flex Down Mortgages are not available to everyone. There is strict criteria that must be met in order to be approved for a mortgage like this.
This criteria includes:
1. Must have mature and impeccable credit history
2. Solid and stable full time income
3. Enough savings to pay for closing costs (legal fees and land titles costs)
4. Be able to afford the mortgage and the new debt taken to fund the down payment
Changes to the Canadian mortgage industry over the last 15 years.
Home purchase mortgages.
Purchase plus improvements mortgages.
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Kevin Carlson – Mortgage Broker – FCAA Lic. #315902
DLC – TMF – FCAA Lic. #316454