Saving the required down payment can be a huge obstacle for many “would be” home buyers despite having excellent credit and good cash flow. Many of our banks and lending institutions have realized that these potential home buyers are valuable to the housing market, so they are now offering the new “No-Money-Down” mortgage option that allows these potential home buyers to purchase a new home without the required 5% down payment.

When buying a new home, mortgage insurance is mandatory unless the home buyer has more than 25 % of the mortgage sum to put down. In most cases, saving such a large down payment is next to impossible, so with mortgage insurance from either the Canada Mortgage and Housing Corporation (CMHC) or GE Capital Mortgage Insurance Company (GEMICO), home buyers have been allowed to put down as little as 5%, but sometimes even saving 5% is a daunting task. For this reason, lenders are making it easier by granting the 5% up front so home buyers can make the down payment and appease the mortgage insurers. This is why it is sometimes called a “Cash-Back” mortgage.

Home buyers interested in the “Cash-Back” or “No-Money-Down” mortgage option must show the following to the bank or lending institution before being approved for this mortgage option :

• Excellent credit rating
• Steady income (cash flow)
• Ability to pay closing costs (e.g. lawyer fees)
• Ability to pay slightly higher interest rates

If you have a history of settling your debt and your income is steady and sufficient to support a mortgage payment, you could qualify for this mortgage. This means you can start building equity in a home rather than renting your money away. For more information, please call us today or use our online application to see if you qualify.