Five Per Cent Down Payment Program for Canadians

[Navtaj Chandhoke]

Five Per Cent Down Payment Program for Canadians

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Program

With as little as five per cent down

payment, from personal or other sources

(see below for eligible other sources), all

home buyers have access to mortgage

insurance enabling them to enter the

housing market, as long as they can meet

the standards for a five year fixed-rate

mortgage.

Details

mortgages is available to both first time

and repeat home buyers. Homebuyers

have the option of using personal sources,

such as savings or gifts, or other sources,

such as lender incentives, borrowed

funds/credit, or sweat equity (the amount

of money spent to help construct the

home) for the required five per cent down

payment.

up to 32 per cent of their gross monthly

household income for payments of

principal interest, property taxes and

heating, and total debt load cannot exceed

40 per cent of monthly household income.

able to qualify for a five year fixed-rate

mortgage even if they choose a mortgage

with a lower interest rate and shorter term.

per cent of the lending value of the house

where the five percent down payment

comes from personal sources will be 2.75

per cent of the mortgage loan. Insurance

premiums on loans for 95 per cent of the

lending value of the house where the

five percent down payment comes from

other sources will be 2.9 per cent of the

mortgage loan. This premium can be

added to the mortgage.

at the time of application, their ability to

cover closing costs equal to at least 1.5%

of the purchase price.

being met by way of a financial gift,

the funds must be in possession of

the borrower 15 days before making an offer

to purchase.

to purchase their home, the maximum

amount that can be withdrawn if

re-financing their mortgage is 85 per cent

of the value of their home.

Program is not available for non-owner

occupied properties. These properties

require a minimum down payment of 20

per cent.

allowed amortization period for mortgages

with less than 20 percent down payment

is 25 years.

For more information call CMHC at

1-800-668-2642 or access through

http://www.cmhc.ca

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