There is so much misinformation out there in the market place to day around the down payment requirements when you purchase a new home so lets have a virtual discussion around the topic.
No, I cannot magically create or make it look like you have a down payment when you dont, that is called mortgage fraud and I could lose my license if I did such a thing.
No, you do not require 10% down if this is your second or third or forth home purchase.
No, banks will not provide you with a cash back incentive and allow you to use it as the down payment, that program died a while ago when new rules were brought down by the federal government.
No, the seller of the house can not gift you or lend you the down payment however if the seller is immediate family they may be able to gift you 5% equity.
No, you can not borrow the money from a friend.
So what can you use for a down payment and how much do you need?
If you are looking to buy an owner occupied home that is 1 or 2 units then you only need 5% down unless the lender feels the deal is too weak and more of a down payment could mitigate the weakness in the application. That 5% down can come from various places such as your personal savings, your Registered Retirement Plan, the sale of an asset, a non repayable gift from an immediate family member or you could borrow it from your line of credit, or credit card. Lenders are under very strict guidelines when it comes to providing a paper trail of this money and this is due to the Anti Money Laundering and Terrorist Financing Act so be prepared to answer a lot of questions and provide a lot of paper.
When you are getting a gift from immediate family that person or persons will be required to sign a gift letter stating that the gift is non repayable and who do lenders deem to be immediate family? Well it can be parents, grandparents, and siblings, that is it. Aunts, uncles, girlfriends, in laws, cousins, spouse, these people do not fall under the immediate family guidelines and while some lenders will grant an exception it is not a guarantee that they will allow these people to gift you the down payment.
So when it comes to the strength of the down payment lenders give more points to the application if the source of funds is coming from your savings, RRSP or sale of an existing asset, fewer points are given if it is a gift and not many points given at all if you are looking to borrow your down payments. If you are starting a new job, have weak credit and are currently carrying quite a bit of debt the likely of you getting approved for a mortgage with a borrowed down payment is slim to nil. Lenders really like to see that your savings habits have been established and that you have the discipline to budget, manage your revolving credit well and save money. Please call me if you would like to discuss your individual situation because everybody has a different story and there are exceptions to every rule.
Canadian home sales edge higher in March 2019
Home sales via Canadian MLS Systems edged up 0.9% in March 2019 following a sharp drop in February, leaving activity near some of the lowest levels recorded in the last six years.
There was an even split between the number of markets where sales rose from the previous month and those where they waned. Among Canadas larger cities, activity improved in Victoria, the Greater Toronto Area (GTA), Oakville-Milton and Ottawa, whereas it declined in Greater Vancouver, Edmonton, Regina, Saskatoon, London and St. Thomas, Sudbury and Quebec City.
Actual (not seasonally adjusted) sales activity fell 4.6% y-o-y to the weakest level for the month since 2013. It was also almost 12% below the 10-year average for March. That said, in British Columbia, Alberta and Saskatchewan, sales were more than 20% below their 10-year average for the month. By contrast, activity is running well above-average in Quebec and New Brunswick.
It will be some time before policy measures announced in the recent Federal Budget designed to help first-time homebuyers take effect, said Jason Stephen, CREAs President. In the meantime, many prospective homebuyers remain sidelined by the mortgage stress-test to varying degrees depending on where they are looking to buy. All real estate is local, and REALTORS remain your best source for information about sales and listings where you live or might like to in the future, added Stephen.
5 ways to help stop the sniffles this allergy season
(NC) Spring has sprung again and while the warmer weather is definitely a welcome change, the return of itchy eyes and a constantly dripping nose may not be.
Its estimated that 25 per cent of Canadians are affected by seasonal allergies, and depending on what you are allergic to, allergy season may not just affect you in the spring but could also linger right up until the first frost in the fall.
This spring, try to avoid the discomfort by getting to the bottom of what is causing your allergies before they start. Here are five tips to help you get ahead of your symptoms:
Check the pollen forecast: Be on top of this as it can change daily and really affect your symptoms. If youre planning on exercising, go to the gym or exercise inside on warm, windy days.
When you are outside, protect yourself: Wear sunglasses or a hat not only do they look good and block the sun, they also help keep pollen off your body and out of your eyes.
Cover up when being active outside: If you are doing outdoor activities like cutting the lawn or gardening, consider wearing a mask or scarf to cover your nose and mouth.
Protect yourself from pollen: We carry a lot of pollen into the home with us. Wash your bedding more frequently during spring, summer and fall; keep your windows closed and remember your pets can track pollen into the house, too.
Find the right product: Speaking to your local Shoppers Drug Mart pharmacist can be your first line of defense. They can help assess your symptoms and recommend an over-the-counter medication or product. If this isnt enough to kick your symptoms, your pharmacist can write you a prescription for a medication in all provinces excluding British Columbia and Ontario. If your symptoms are more severe, pharmacists in B.C. and Ontario can work with your doctor to make sure you have the right treatment option for you.