NO MONEY DOWN MORTGAGE

NO MONEY DOWN MORTGAGE

• First time home buyers just starting out with no down payment.
• Students that have a strong cosigner.
• Anyone who has their cash assets tied up and therefore has no down payment.
• Borrowers with excellent credit.

3 Ways to get a NO Money down Mortgage

• Gifted down payment:* If you happen to have a generous family member or two, lenders allow you to use a gifted amount of money as your down payment.  The person gifting you the money must sign a gift letter saying that you are not required to pay back the gifted money at any time (you must also sign the gift letter) and they must be a blood relative.

• Flex Down:* Flex Down is a program that lenders offer that allows you to borrow your down payment (something that, otherwise, would not be allowed).  Common sources for borrowed down payment for the Flex Down program are personal loans, lines of credit or credit cards.  One thing to keep in mind is that the loan repayments must be taken into account when qualifying for your mortgage, so it could affect the purchase price that you qualify for.  You must also have a minimum credit score of 650* to be eligible for the Flex Down program.

Cash Back:* The Cash Back program offers you the ability to receive 5% of your mortgage amount back in cash at closing date.   One down side is that the interest rate on a Cash Back mortgage is slightly higher than regular fixed rate mortgages.  You must have a minimum credit score of 650* to qualify for the Cash Back program.

• You must have a good credit: Nothing worse than one month late payment on any credit cards in the last two years. No late payments on any loans or mortgages. No Bankruptcies in the last 7 years and no orderly debt payment
• 2 years in the same line of work and minimum 6 months with a new company

PROS:

• You can own a home without a large deposit or down payment.
• You can build equity immediately rather than continuing to rent.
• You can buy a home when the price is right for you instead of risking an increase in prices while trying to save a down payment.

CONS:

• Insurance premiums can be higher.
• Interest rates can be higher.
• If you need to sell or refinance within a year or two, there is no equity in the property.
• Qualification for this mortgage is stricter than a mortgage with a minimum 5 per cent down payment.
• There are not as many lenders or products available for a no money down mortgage so, there are fewer term or rate options.
• If you use the cash back method and break your mortgage early, you may have to repay the cash back or a portion of it.

This mortgage is available:

• Across Canada*
• On residential single-family, owner-occupied properties
• On high ratio (insured) loans

*subject to change