Zero Down Mortgages Still an Option

Down Payment Money Available to Qualified Applicants (OAC)

With the sweeping mortgage reforms that have taken place in the past 2 years most people think that they need to have at least 10% of their purchase price saved up for the down payment. Although the actual rule is that buyers need at least 5% for the down payment, it is a little known fact that they don’t need to have saved that money.

Yes, you read that right. You don’t have to have the 5% saved up. Here are a couple of options for people who don’t have the 5% saved:

• Gifted Down Payment: There’s nothing better than free money, so if your parents or your kids want to give you a gift for part or all of your 5% down payment take it if it won’t change your relationship with them;
• Cash Back Mortgage: Some lenders offer the 5% in the form of Cash Back on closing. During your 5 year fixed rate term mortgage you will have a higher rate than the best on the market, but you get the 5% down so you can buy;
• Personal Loan: You can borrow your down payment from a bank, trust company, credit union, or any other party that is arm’s length. That means you can borrow the down payment from a private person too, as long as they aren’t related to you. All we need to do is take the payment from the loan into account when figuring out your affordability ratios to qualify for the mortgage.

Here are a few types of people who might be having a hard time saving their down payment that would really like to own a home: A single mom or dad, a recently married couple who have some of their down payment saved but not all of it, or someone who has recently graduated from post-secondary school and has just obtained a good job with a good company (maybe a year on the job).

If you know anyone who laments that they’d like to buy a home but they think they can’t because they don’t have their down payment saved please tell them to call us. They might just be in their new house by Christmas!

Warm regards,
Chris
--
Christopher Bisson
President and Mortgage Broker
The Mortgage Centre
519-763-3900 x1003

www.guelphmortgagecentre.com