Here are the answers to your questions about mortgage loans.
What is the minimum down payment?
You need to put down at least 20% of the selling price to qualify for a mortgage. If you don’t have 20%, you can take out mortgage insurance and you’ll only need to put down 5%. In both cases you need to prove you have 1.5% of the selling price to cover start-up costs.
How can some builders have properties for sale without requiring a down payment?
Some builders do offer Canada Mortgage and Housing Corporation (CMHC)-approved programs that don’t require a down payment. However, the programs usually have very specific eligibility criteria and the down payment is often just delayed.
There are really only a few exceptions to the legal requirement to make a down payment when buying a property. The best way to lower your down payment is to insure your mortgage with CMHC or Genworth. Insurance can get your down payment to 5%.
As with traditional mortgage loan insurance, every down payment has to come from the buyer’s own resources or close relatives.
Debt-savvy buyers can put 5% down and access many resources, including a loan or lender incentives, as long as the down payment is from a source that is arm’s length to and not tied to the purchase or sale of the property. Contact your lender to see if they can offer you mortgage insurance and if you’re eligible. Continue reading →
With a lot of discipline and determination, you can stay on top of your debts. Some decisions you make when buying a home can substantially reduce your interest fees.
Here are some things that could have a big impact on how much money is left in your pocket.
Make the largest down payment you can
This will reduce the amount of your mortgage and the length of time it takes you to repay it. To help you increase your down payment, you can use the Home Buyers’ Plan. To avoid paying interest needlessly, consider buying a smaller home and paying it off in a period of 17 years. Continue reading →
A growing number of Canadians are buying a second a home. Given the current state of affairs at the global level, many people who live in the city are dreaming of getting away from it all in a more peaceful setting, while others who live far from the lights of the big city are looking for a place closer to the action.
Even though a second home is often referred to simply as a vacation property, the decision to buy should never be taken lightly because there are some major factors to consider.
Downpayment is only the beginning
Buying a property means that your borrowing capacity will have to be evaluated and you will need to draw up a detailed budget. There are a number of other factors to take into account when buying a second home. After all, you’ll probably be spending less time in your second home than in your primary residence but you’ll still be faced with the maintenance costs and other expenses associated with home ownership. For example, you have to cover taxes, insurance, heating, electricity, water as well as possible renovations, seasonal upkeep and transportation. All of those expenses are in addition to what you’re already spending on your primary residence!
As you can see, before you start looking for the ideal location or the property of your dreams, you should take a close look at your budget to see whether you can afford all the costs that will be involved in owning a second home.
The purchase of a first house involves reflection and planning. By following the proposed stages, you will put all the chances on your side to make your project a success. More details for these steps are available by clicking the following links, or go to National Bank’s website www.nbc.ca
1. Calculate your borrowing capacity
Estimate how much National Bank could give you to buy your property.
Your National Bank advisor can help you calculate your borrowing capacity by reviewing your financial situation. You can also have an idea of your borrowing capacity by using our calculation tool. Continue reading →