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Can you still get a mortgage to buy a home if you have not saved a down payment?

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The answer is YES you can! Back in 2015 the Federal Government changed mortgage rules for homebuyers with no down payment saved and personally I believe these changes were a good thing.

Previously, majority of zero down mortgages were simple cash back mortgages that came with much higher interest rates where the lender would provide the 5% down payment for them by way of cash back delivered to your lawyer at closing date along with the mortgage funds.

I have always preferred the flex down mortgage option because it still allows you to secure a mortgage at a discounted rate

If you’re looking to buy a home and have steady consistent employment income in addition to a good credit history, there’s no longer any reason to wait until you’ve saved up the minimum 5% percent of the purchase price of that house you want. While renting has some perks in terms of maintenance and upkeep that your landlord will take care of instead of you, it ultimately is a poor use of your money, because you are not building up any equity in an investment. You are just paying off someone else’s mortgage on the house or apartment building where you live.

With flex down mortgages, you can borrow the money for your down payment from a line of credit, loan or a credit card. Approval under this product is based on your income, credit and current debt load  because you are taking out not one but two loans to cover the purchase of the property and you have to make both payments each month to ensure that you stay in the home.

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.

You may be wondering how the bank would even know whether or not you took out a flex mortgage down payment loan in the first place? As long as you show up with the down payment money, it doesn’t matter where it came from, right? Wrong, an important requirement of the mortgage approval process means giving that lender access to your financials. That includes last 3 months of bank transaction statements along with source of any large deposits.

Still have questions about this? Contact the MortgageGirlca and put her over 35 years of experience to work for you. #benefitfromexperience #expertadvice Former banker turned #MortgageBroker. Visit her website, Email: info@mortgagegirl.ca Phone 780-433-8412 or follow us on Facebook or Twitter

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2 thoughts on “Can you still get a mortgage to buy a home if you have not saved a down payment?

  1. Pingback: With the mortgage rule changes am I ever going to be able to stop renting and buy a home? |

  2. Pingback: MortgageGirl Answers Frequently Asked Questions (Fall 2017) |

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