Free Down Payment MortgageFree Down Payment Mortgage
While many people may think that you need to save a minimum of 5% down payment before you can purchase a home, we at MyMortgage.ca would like to remind you that the Free Down Payment product is still available.
The Free Down Payment mortgage option allows you to purchase a home without having to save the 5%, as the lender will provide you with the 5% down payment. The Free Down Payment Mortgage offers a maximum of two borrowers with a minimum Beacon score of 680 a zero down
payment mortgage opportunity for owner occupied properties. Our lenders will advance eligible clients 5% of the property lending value in addition to the mortgage advance.
Example 1 Applicant
Mr. Lee is an electrician and has a strong Beacon Score above 680 and his income is high enough to qualify for the necessary mortgage amount. He has not been able to save the full 5% down payment but he has found a house in a community where he feels he can raise his children as there is a good school nearby. He wants to own this home so he does not have to rent and potentially have his children change schools when his lease comes up. Mr. Lee would qualify for the Free Down Payment Mortgage to purchase this single family home for $400,000.00.
Example 2 Applicant
Ms. Adams has started saving $500.00 each month for the down payment for her first home. She noticed a unit in a complex that came up for sale for $400,000.00 in an area that rarely has any listings. At this point in time she does not have enough saved but she knows the potential appreciation with this unit, as it is a highly sought after complex. If she waits to purchase this home until she has accumulated her full down payment, based on her saving of $500.00 per month, it will take Ms. Adams over 3 years before she has saved all 5%. By taking advantage of the Free Down Payment Mortgage, she can take possession of this home immediately and reap the benefits of the appreciating value of the home. Moreover, Ms. Adams will be paying down her mortgage with the money she would otherwise be spending on rent.
Purchase Price: $400,000.00
Down Payment: $20,000 (Provided by lender)
Insurance premium (3.10%): $11,780
Term: 5 years
Amortization: 30 years
Interest Rate: 5.39%
Mortgage Payments: $2,182.99
While both applicants are looking to purchase their homes for different reasons, with the availability of this Free Down Mortgage product Mr. Lee and Ms. Adams can become homeowners sooner than later.
Source: MyMortage news letter