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Low Down Payment Mortgage at *5% down

how to qualify for a low down payment mortgage


Low down payment mortgage is a 5% down CMHC home purchase loan. If you qualify for mortgage this high ratio insured real estate financing, you'll get the lowest interest rates. These are loans to buy a home for borrowers with stable income and good credit score whether first time house buyers or subsequent home buyers.

Submit your application here for the CMHC insured home purchase loan, the low down payment mortgage. Or, visit www.axcessmortgage.ca prime real estate financing for more home mortgage loan information.

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In January 2018, the Federal Government ruled that lenders add a 2% STRESS TEST to the interest rate you are offered to qualify for a mortgage.

This is to ensure you can still afford your home if the interest rates increase when it is time to renew your mortgage.

For loans to buy a home with less than 20% down, CMHC mortgage insurance is required.

The Canadian Bank Act only allows banks and mortgage companies to lend up to 80% of the residential property value – unless, the mortgage is insured.

You must qualify for both a mortgage and home mortgage insurance – this is because each component is provided separately.

If for whatever reason you do not qualify for mortgage that is insured your next best option is the home buyer loans sub prime mortgage with 20% down.



Mortgage minimum down payment - how much down payment do i need ?

* 5% minimum down payment Hamilton ON and throughout Ontario, loans to buy a home.

Low down payment mortgage: 

Canadian Finance Minister Bill Morneau made the announcement that the minimum down payment for houses will increase effective Feb. 15, 2016. 

  • mortgage minimum down payment is 5% on the first $500,000,
  • plus added 10% down payment on the amount over $500,000.

A home costing $700,000 would require a $45,000 down payment - 5% ($25,000) on the first $500,000 plus 10% ($20,000) on the remaining $200,000.

What about the low down payment mortgage guidelines?

If you have good credit score and income, you'll need * 5% down up to $500,000 purchase price, and 10% thereafter, of your own or gifted money. All this at best interest rates.

We're talking about a high ratio insured home purchase loan.

What is the mortgage insurance protection about? The mortgage insurance protects the lender against your default.

Why do you need mortgage insurance? It is compulsory by law. This lets you buy a home with a minimum down payment and makes you attractive to lenders as they have no risk in lending you money - the Canadian Government, namely CMHC. Insured low down payment mortgage is an ideal first time buyer mortgage for good credit score and stable full time income or, any subsequent buyer who meets the insurer's lending guidelines.

CMHC is main insurer for a low down payment mortgage 

As a crown corporation, CMHC (Canada Mortgage and Housing Corporation) has a mandate to provide all Canadians with the opportunity to become homeowners.

There are also private companies Genworth, AIC and Canada Warranty, which offer competitive programs to CMHC as well as some specialty programs in mostly urban areas.

 

Residential mortgage loans insurance is not the same as mortgage life insurance

Insurers guarantee the lender that they will repay their home purchase loan in full, should you the borrower, default on the mortgage (provided that the lender has complied with all the terms and conditions of the insurer.)

Banks in Canada and others institutional lenders are required by law to insure all high ratio mortgage loans to buy a home - that is when your down payment is 20% or less. In addition to this legal requirement, this gives the financial institutions more security if you should default.

I think that best low down payment mortgage loans are offered by the broker channel lenders. If you need a residential mortgage Hamilton home purchase loan, we'll make sure that you get best mortgage terms and best Canadian mortgage rates, without having to ask!


insurance premiums are affordable and are added to your mortgage loan

Insurance premiums are based on the ratio of the mortgage amount to the property value and the quality of the applicant covenant. For example, different rates apply to an employed vs. self employed applicants, with the rates for self employed being higher.

As the loan amount vs. the property value ratio increases, so does the insurance premium, ranging from 1% at the low end to over 6% of the financed amount, at the high end.

The premium is paid by the borrower - it is added to the mortgage amount and spread out over the life of the loan – the fractional amount is included in the monthly payments. You can also choose to pay it upfront in one lump sum if you have the available money. 

If you need a home purchase loan where the loan amount is greater than 80% of the purchase price, then insurance is a requirement to qualify for a mortgage.

To better understand and effectively work through all the requirements of both the mortgages insurance and various residential lending programs, please submit your application.

Marie Copeland FSU, Mortgage Financing Hamilton On


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*Lenders change their products and interest rates regularly and without notice. Check with us for updates.


Axcess Mortgage and Loans Financing Co. Ltd. | FSRA 10420 

www.axcessmortgage.ca


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1 (905) 537-8815


Banks and AAA lenders pay us for your service. Some alternative mortgage financing and all private mortgage lending broker fees are payable by clients.