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Don't have the usual 25% down payment? No worries — Increase your leverage with a high ratio mortgage! This consumer -oriented program makes the dream of home ownership a reality for more Canadians than ever before.
There are programs available for you to finance up to 100%
of the purchase price of your home. Generally these programs
charge a slightly higher rate of interest, but this is usually
offset by getting into the housing market sooner. Please contact
the Gibbard Group for full details. There are two programs
are available that let you buy a home for as little as a 5%
down payment. One is administered by GE Capital Mortgage Insurance
Co, a private sector insurer, and the other by CMHC, a Federal
Crown Corporation. Read carefully; the small print could create
unexpected hitches! In most cases, clients with a minimum of
5% down payment will be eligible for the best discounted rates.
Contact The Gibbard Group to guide you through the process. Any qualified
borrower who meets the lenders criteria for income and credit
may be eligible for these programs. You do not need to be a
first time buyer to qualify. How it works For 0% down payment Yes, there is a new mortgage in Canada that will allow you to finance up to 100% of your new home purchase. You can also use this mortgage product to refinance up to 100% of your home’s value for renovations, debt consolidation, etc. Please note the fees and interest rates are different on this program than a client who has at least 5% to put towards a down payment. Please contact the Gibbard Group for more information. Even without a down payment you can start building equity right away! To qualify for a CMHC insured mortgage: Your monthly payments for all obligations — shelter costs plus loan, lease and credit card payments, plus alimony etc. — must not exceed 40% of your gross pre -tax family income. The payments on your mortgage must be calculated using the 3 year rate (5 year rate for the 5% down program).Example: If the best 3 -year rate you can get is 6.5%, the monthly payment on the $182,450 mortgage shown above — at a standard 25 year amortization — is $1,222.09 (see Mortgage Analyzer calculator). If your annual taxes are $2,000 and annual heating $1,200, then your annual shelter costs would total $17,865.12. Assuming no other payments, an income of $55,830 ($17,865/32%) would qualify you for this mortgage. If you have monthly car and credit card payments
of $475.00, this would add $5,700 to your annual debt servicing,
for a total of $23,565. Dividing this figure by 40% (see above)
gives a required qualifying income of $58,900. In general, the credit status of an applicant must meet the lending criteria of the particular mortgage lender. A Gibbard Group Consultant can help you meet the required criteria and assist you with the entire mortgage process. Plus we deal with many lenders and therefore have a greater chance of matching you with a lender. Also, while CMHC will qualify an ex -bankrupt applicant for insurance two years after discharge with subsequent re -established credit, many lenders' own rules over -ride this feature, and they will decline the application. On the other hand there are a number of lenders who specialize in granting and administering mortgages to the full extent of the National Housing Act at competitive interest rates. For more information please feel free to visit: CMHC – www.cmhc-schl.gc.ca GE Capital – www.gemortgage.ca or contact us at the Gibbard Group. back to the top of page |
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