Wow… its 2016 and year is off to yet another interesting start, CMHC and the finance department are trying to reign in the real estate giants that are Vancouver and Toronto. With average prices nearing a million in Vancouver and Toronto market still hot but nowhere near as high as Vancouver where does it all stop. Will the change in the down payment make a difference in their markets, especially Vancouver where foreign buyers are already putting down in excess of 35% for what seems a safe haven to hide your money for now? The weakening dollar is only encouraging the investors as it’s now a 30% discount if you’re buying in the almighty green back.
So what about the rest of us, struggling to make sales in Alberta? Here’s a list of mortgage tools that may help those sagging sales. All of these are programs allowed by CMHC and available through some but not all which is why you need a mortgage broker to guide you.
Flex Down or Alternative Down Payment
Flex down or alternative down payment is the true name of this insurer program, basically if your client has good credit and can debt service the extra payment they can borrow up to 5% of their down payment. Only about 4 lenders left doing this program and we know who they are and can facilitate a loan through Grouplend to help your client get a mortgage.
RRSP for Down Payment on a Mortgage
RRSP for down payment on a mortgage, did you know that first time buyers can use RRSP for down payment. Did you also know that there are two lending institutions that will loan up to $25000 for rrsp and then allow the clients to withdraw that money, after 90 days, to use for the first time buyer program and repay it over 15 years? Payment is amortized or that period as well so very little effect on debt servicing.
100% rental offset for legal suites came in to effect this year and will allow your clients to use all the rent to qualify for properties with a full city approved legal suite when applying for a mortgage.
Gifted Down Payment
Gifted down payment, better yet how about gifted equity? If the client is buying their parents property then the down payment can be gifted in existing equity in the property. Direct relatives can also gift cash to a child for down payment.