Borrowed Down Payment
Product Description:
This program is suited for home buyers who wish to purchase a home where part or all of the down payment is from borrowed sources.
Purpose:
• Mortgages in first position only
• Insured
• Purchase
• Purchase Plus Improvements
Property Type:
• Owner Occupied
• Partially Owner Occupied
• Maximum 2 units, where one is owner occupied
Terms:
• 3 Year Fixed closed
• 4 Year Fixed closed
• 5 Year Fixed closed
• 5 Year ARM closed
Rates:
• Standard insured 5 year fixed, or as per terms above. Contact broker or broker’s website thebroker.ca/mortgage-rates/ for up to date rates. Email us to be added to our rate emails.
Default Insurance Premium (on LTV of : 90.01 – 95.00%):
• Premium Rate: 4.50%
• Top-Up Premium: 6.60%
LTV:
• 90.01 – 95.00% LTV
Minimum Loan Amount:
• $50,000
Maximum Loan Amount:
• Insured / Insurable: $924,999
Amortization:
• 5 – 25 years
Borrower Qualification:
• Insured, Insurable
• Credit: Minimum score of 650 (Equifax) or higher. Minimum of 2 years history reporting on credit bureau, and no late payments in the last 36 months. No previous bankruptcy or consumer proposal
• Strong employment history
• Maximum GDS/TDS ratios allowed is 39%/44%
• Repayments must be included in the TDS calculation (ex: Unsecured LOC at 3% of balance, Credit Card at 3%, Personal Loan at actual payments)
• Qualified on the greater of Contract Rate + 2% or 5.25%
• Guarantors are to occupy the subject property
Down Payment:
• Any portion of the down payment may be borrowed.
• Repayment of borrowed funds to be included in the TDS per standard Debt Servicing requirements.
• Eligible sources are to be arm’s length to the transaction and can include but are not limited to:
— Personal loans
— Lines of credit
— Credit cards
— Gifts from non-immediate family (considered borrowed)
• Ineligible: Sources of down payment which are not arm’s length to the transaction are not eligible. These can include but are not limited to: loans or incentives from the builder, Realtor, mortgage broker, solicitor or vendor, or any loan to the borrower that impacts the property selling price.
• Required down payment amounts:
— Property value up to $500,000 – 5% down payment required
— Property value > $500,000 and < $1,000,000 – 5% down payment on the first $500k, with additional 10% down on the portion of the home value above $500k
Broker fees:
• No broker fees to pay with this program
Ineligible Products:
• Business for Self (Alt. A) Program
• Family Plan Program
• New to Canada Program
• Vacation / Secondary Homes Program (Type B Properties)
• Investment Property Program
• Second Mortgage Program
Ways to apply:
• 24/7 secure online application at TheBroker.ca
• Back up application link at Sash.cc
• or scan the QR code in the email signature below
Conclusion
This article is a brief overview of the borrowed down payment mortgages available in today’s market. While the process may be complex, borrowers can take steps to improve their chances of approval and maximize their purchase potential in the current real estate market.
At TheBroker.ca Ltd, we understand what needs to be done to secure a mortgage. We can help identify lenders that best match your credit profile. Talk to us. We can offer you helpful advice on getting a mortgage, understanding current mortgage rates, and guide you through the process that will help you make informed decisions that align with your financial goals.
About Us
At TheBroker.ca Ltd, we are constantly looking for ways to provide helpful advice related to mortgages, current mortgage rates, and more. If you have any questions or need further assistance, we offer a complimentary no-obligation consultation. Feel free to reach out to us at (519) 252-9665 during our regular business hours. Alternatively, you can fill out our contact form, and your message will be promptly emailed to us. We value your time and inquiries, and we make it our priority to respond to all messages within one business day. When reaching out, please provide us with your contact details, a brief overview of your mortgage needs, and the most convenient times for you to have a consultation. We look forward to assisting you with your mortgage.
This article was brought to you by TheBroker.ca Ltd., a mortgage brokerage that is licensed with the Financial Services Regulatory Agency of Ontario (FSRA), which regulates businesses in the financial sector. The Principal Broker Sash Trajkovski has over 20 years of real estate and mortgage experience in the Ontario marketplace. You can verify our licenses by visiting the following links from FSRA’s website: our corporate license and Principal Broker license. Our mortgages services are available to all residents of Ontario. If you’re in Ontario and looking for more personalized advice and information, consider booking your Complimentary Consultation today, and let us help you understand the details that will guide you on your path to a suitable mortgage solution.
Disclaimer: Please note that this information is current as of the date of publication and is intended to be general in nature. It is not intended to provide legal, tax, financial, or other professional advice and should not be relied upon as such. Always consult with a professional for advice tailored to your individual circumstances.
