Special offer

100% Financing is Still Available

By
Mortgage and Lending with The Mortgage Group

Back in July, 2008 the Department of Finance announced a major change to the structure of the mortgage market. As of October 15th, 2008 they no longer allowed 100% financing and 40 year amortizations. They now require 5% down payment and a new maximum of 35 year amortizations. Can I still get 100% financing? YES, it just costs you a little more - in fact 2% more. With the industry changing there has been a recent switch back to the ‘Cash Back’ Mortgage. Lenders only require that you prove that you have 5% down payment. The lender will actually return the 5% back to you upon closing. The benefit to you is the extra cash to use as you choose and the benefit to the Lender is that you have to buy a higher interest rate. However, you only have to pay back 95%. Purchase Price $200,000 Down Payment $10,000 Loan Amount $190,000 Cash Back $10,000 (Amount is for example purposes only and does not reflect CMHC fees) The catch is that you still have to prove your down payment. But there are several ways to do that including borrowed funds, gifts, 100% sweat equity and Lender cash back incentives, as well as traditional sources. This allows you to borrow up to 95% Loan-to-Value (LTV) which satisfies the government’s regulation for insured mortgages. The bonus is that you retain the 5% down payment, and have the extra cash required for moving expenses, legal fees, furniture, closing costs etc.