100% Financing to End

It appears that Credit Unions will soon be unable to offer 100% financing. We’ll keep you posted on deadlines for when this is eliminated. Some lenders in the past had given the green light to borrowers with no down-payment as long as they bought insurance. They did this by offering certain types of cash-back mortgages. The new guidelines would eliminate these loopholes.

Home Mortgage Rates for April 30, 2012

Our Best Rates:

Terms	Posted Rates	Our Rates
6 MONTHS	4.45%	4.40%
1 YEAR	3.20%	2.75%
2 YEARS	3.55%	2.99%
3 YEARS	3.95%	3.19%
4 YEARS	4.64%	3.29%
5 YEARS	5.14%	3.29%
7 YEARS	6.35%	3.99%
10 YEARS	6.75%	3.99%
Rates are subject to change without notice. OAC E&OE

CURRENT PRIME RATE IS

3.00%

PRODUCT	RATE
Variable Rate Mortgage: Prime - 0.00	3.00%

 

Downpayment Options

Buying a home with zero down could be a limited time opportunity

Zero-down payment can help get Canadians into their homes faster, saving potentially thousands in rent, and giving them a jump start on building wealth.

A cash-back mortgage that provides the cash upfront is one zero down option, another is to secure the downpayment through a loan or unsecured line of credit.

Zero down could be a limited time opportunity. Cash back options will no longer be available if the proposed OFSI (Office of the Superintendent of Financial Institutions) rules are implemented. Right now these new rules are just a proposal and out for comment, although it's quite possible they will be implemented. As a result, qualified homebuyers should take a look at these opportunities now while they are still available.

A zero-down mortgage is certainly not for everyone but if you have stable income, good credit and the ability to comfortably handle your monthly mortgage payment and ongoing housing expenses, a well-designed zero-down plan can get you in your home sooner. We can review your situation and help you determine if zero down is the right financial decision for you.

Talk to us today if you want to explore how you can purchase now without waiting.

 

Robert Lumb

MortgageDirect2u

Tel: (416) 275-9284

rlumb@mortgagedirect2u.ca

http://www.mortgagedirect2u.ca

 

What's up with Zero Downpayment?

A few years ago, there was a lot of buzz about “zero-down” mortgages – and the idea of buying a home without any downpayment was a pretty attractive prospect for Canadian homebuyers. Then the economic crisis struck the housing industry in the U.S., and many wondered if zero-down mortgages were financially reckless. The answer, as ever, is both yes and no.

A zero-down mortgage is not for everyone – but for qualified homebuyers, a well-designed zero-down plan can be a tremendous financial boost: getting Canadians into their homes faster, saving potentially thousands in rent, and giving homebuyers a jump start on building wealth.

What about the worry that the Canadian housing industry is following the same catastrophic path as in the U.S.? Well, let’s take a clear-eyed look at why the Canadian and U.S. situations are very different. The ability of our American neighbours to tax-deduct the interest on their mortgage created millions of heavily-leveraged homeowners. And their previously lax lending rules on subprime and adjustable rate mortgages coaxed many U.S. homebuyers into homes that were affordable for only the first few years, which ultimately led to the U.S. housing crisis.

The problem mortgage products were never available in Canada. Additionally, the Canadian government has tightened mortgage rules three times in less than three years, while lenders have become increasingly cautious. Canadians also remain prudent with their financial management; according to Canadian banking industry figures, the percentage of mortgages in arrears currently sits at a mere .38 of one percent.  That combination – regulation, conservative lending and consumer attitude – have played a big role in protecting the Canadian housing market.

Today, buying a home with zero downpayment for the right candidate can still be a financial breakthrough, and the beginning of a successful wealth journey. If you have stable income, good credit, and the ability to comfortably manage your monthly mortgage payment and ongoing housing expenses, then you could be a candidate for a zero-down mortgage.  Consider that the money currently going to rent could be helping you build home equity right now. And that we are in a time-limited window of opportunity of historically low mortgage rates – meaning you could lock in a great payment plan for five or even ten years instead of waiting and saving… only to find that rising interest rates are putting your dreams of home ownership out of reach.

So how can you get around saving that critical 5% downpayment: the minimum required to qualify for an insured mortgage? We can review your options, which include:

1. Borrowing the downpayment through a loan or unsecured line of credit;

2. Securing a “cash-back” mortgage that provides the cash upfront; or

3. Having the downpayment gifted to you by a parent or other blood relative with a letter saying you are not required to pay the money back at any time.