Downpayment Options
Zach Silverman | February 28, 2024
When it comes to purchasing a property through mortgage financing, your down payment plays a pivotal role. In Canada, lenders are mandated to lend only up to 95% of the property value, necessitating a minimum 5% down payment.
Default insurance, provided by entities like the Canadian Mortgage and Housing Corporation (CMHC), Sagen (formerly Genworth Canada), and Canada Guaranty, facilitates mortgage financing with less than 20% down, albeit at an additional cost.
Crafting a Plan for Your Down Payment
Leveraging Your Resources
If you've diligently saved funds for your down payment, demonstrating a 90-day history of these savings is crucial. Large deposits require documentation to verify their source, ensuring compliance with anti-money laundering protocols.
Proceeds from Property Sale
Selling a property and utilizing the proceeds for your new purchase? Providing transaction paperwork substantiates your down payment.
RRSPs via the Home Buyer’s Plan
First-time homebuyers can tap into their RRSPs tax-free, accessing up to $35,000 individually or $70,000 as a couple, repayable over 15 years.
Gifted Down Payment
Family assistance can bridge the down payment gap. Immediate family members can provide a gift letter, confirming the funds as a non-repayable gift, with deposited proof required.
Borrowed Down Payment
With robust credit and a favorable income-to-debt ratio, borrowing part or all of your down payment is feasible, provided debt service ratios accommodate the payments.
Qualifying for a mortgage necessitates a strategic approach to your down payment. Whether it's leveraging personal resources, proceeds from a property sale, RRSPs, familial gifts, borrowed funds, or a blend of these options, Silverman Mortgage Group is here to guide you.
Ready to embark on your homeownership journey? Connect with us to discuss your down payment and mortgage financing needs. It's never too early to explore pre-approval options and pave the way to your dream home!
#SilvermanMortgage #DownPaymentOptions #HomeownershipJourney 🏡💼
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