$0 DOWN PAYMENT

There are numerous reasons for someone not making a Down Payment on the purchase of a property, such as;

No Savings
Prefer to use cash to pay off other debts
Want to keep cash in other investments
Want to do improvements to the property after purchase
Will need to purchase furniture and appliances

While a Down Payment MIGHT lower your interest rate and reduce the amount being financed, equity in itself is not necessarily a good investment. Some common myths about Down Payment and Equity are:

Equity in a home is liquid and will be there for you if needed: Have you ever known of a bank willing to lend a homeowner money based on equity when they are unemployed?
You should always put as much money down as possible: Home equity only grows with appreciation of your home and has no relationship to the down-payment. Have you ever heard of a bank that sent a check for interest on the down-payment
Substantial Equity Enhances your net worth: Maybe, but it earns no return, sits idle, and will not grow to meet your retirement needs and other financial goals. What are the other opportunities? Consider investing in a rental/income property!

There are two different types of $0 Down Payment Mortgages;

100% Financing Mortgages:

With these mortgages, you do not have to have any savings in your bank acount. If you have had some credit problems in the past, we have 100% purchase mortgages that are not Canadian Mortgage & Housing Corporation (CMHC) insured and therefore there are fewer underwriting restrictions. If you have been discharged from a bankruptcy 3+ years ago and have 24 months of re-established credit, you would probably qualify for this program. And, the interest rates are very competitive.

95% + 5% Cash Back:

This CMHC insured mortgage product is designed for clients with a good credit score. Under this program, the lender will "give" you 5% of the purchase price on top of the 95% they will finance on the mortgage. There is a small interest rate premium for this kind of mortgage. And, if you pay off the mortgage before the end of the Term, you would have to repay the 5% Cash Back on a pro-rata basis. Because this mortgage is CMHC insured, the lenders are able to offer very attractive interest rates. You will have to prove you have 1.5% (of the purchase price) in your savings account to be used towards your Closing Costs. However, in reality, you will need about 3% of the selling price to cover all of your closing costs.


	HOME CONTACT US WHY USE A BROKER? FREE HOME BUYER GUIDE CHIP MORTGAGES $0 DOWN PAYMENT FREE CREDIT REPAIR GUIDE BAD CREDIT? SELF-EMPLOYED? FOR SALE BY OWNER DEFINITIONS Intro MMB		$0 DOWN PAYMENT There are numerous reasons for someone not making a Down Payment on the purchase of a property, such as; No Savings Prefer to use cash to pay off other debts Want to keep cash in other investments Want to do improvements to the property after purchase Will need to purchase furniture and appliances While a Down Payment MIGHT lower your interest rate and reduce the amount being financed, equity in itself is not necessarily a good investment. Some common myths about Down Payment and Equity are: Equity in a home is liquid and will be there for you if needed: Have you ever known of a bank willing to lend a homeowner money based on equity when they are unemployed? You should always put as much money down as possible: Home equity only grows with appreciation of your home and has no relationship to the down-payment. Have you ever heard of a bank that sent a check for interest on the down-payment Substantial Equity Enhances your net worth: Maybe, but it earns no return, sits idle, and will not grow to meet your retirement needs and other financial goals. What are the other opportunities? Consider investing in a rental/income property! There are two different types of $0 Down Payment Mortgages; 100% Financing Mortgages: With these mortgages, you do not have to have any savings in your bank acount. If you have had some credit problems in the past, we have 100% purchase mortgages that are not Canadian Mortgage & Housing Corporation (CMHC) insured and therefore there are fewer underwriting restrictions. If you have been discharged from a bankruptcy 3+ years ago and have 24 months of re-established credit, you would probably qualify for this program. And, the interest rates are very competitive. 95% + 5% Cash Back: This CMHC insured mortgage product is designed for clients with a good credit score. Under this program, the lender will "give" you 5% of the purchase price on top of the 95% they will finance on the mortgage. There is a small interest rate premium for this kind of mortgage. And, if you pay off the mortgage before the end of the Term, you would have to repay the 5% Cash Back on a pro-rata basis. Because this mortgage is CMHC insured, the lenders are able to offer very attractive interest rates. You will have to prove you have 1.5% (of the purchase price) in your savings account to be used towards your Closing Costs. However, in reality, you will need about 3% of the selling price to cover all of your closing costs.
			© 2009 Mortgage Managers