Posted by: Daryl & Wendy Ashby | August 9, 2010

5% Down is Still Available

  1. If you have University or College students who need accommodation away from home and you don’t want to waste your hard-earned money on rent over the course of their education, you can still purchase at affordable rates.
If you as the purchaser have no intention of renting the unit out there are two excellent programs to suit your needs.
CMHC/Glenworth financing is available up to 95% of the purchase price on a second residence. The subject property however must be for the use of the applicant or a direct relative and as mentioned, not as a rental property.
It must be occupied by a son or daughter and the title will be placed in the son or daughter’s name with the parents either on the title for a minority interest or simply as Covenanters on the mortgage. There are some tax advantages to going this route.
There is no insurance or interest rate premium under either of these  programs, but the borrower must have the financial capacity and proven income to carry the financing on the new property as well as their primary residence (assuming it is still mortgaged).
Yes, you read it right, contrary to all that you have read about the changes to borrowing, you can still purchase will only 5% down payment for owner occupied properties. You may also use a gift from a relative as a down payment, but documentation validating that it is a gift is required.
You can also still use up to $25,000 from your RSP if you (your son or daughter) haven’t owned a principal residence in the last five years or are a first time home buyer.
Rates have gone down again slightly. A five-year mortgage is now available in the 4.0% range.
The purchase of a leaky condo or the need to add improvements/upgrades to your new home can be included in the mortgage under a policy referred to as “Purchase with Improvements”.
In the case of a “leaky condo”, the strata council must provide you with a proper engineer’s report, evidence that they have received bids to complete the work, the work has been approved and a special levy has been presented to the other owners in the complex.

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