Cash Back Mortgage
Zero Down Cash Back Mortgage Programs
Cash Back Mortgage Vs Zero Down Payment Mortgages
Currently there are no approved programs in Canada that allows borrowers to borrow 100% of the value of the property. Presently minimum 5% of the purchase price plus closing costs is required to purchase the property. Buyers who do not have saved 5% down payment can still achieve Zero Down Mortgage. Lenders can offer 1% to 7% as Cash Back at the time of closing. These funds can be used to cover housing related costs such as appliances, renovations or furniture.
Buying a home with zero or no down payment. Is it worthwhile for you?
Buying a home with zero or no down payment isn’t for everyone. What it takes to get approved is stable income, good credit and ability to carry mortgage payment, other debts and household expenses. If you are struggling to save down payment and paying landlord a large rent, this could be an option for you. It makes sense to take advantage of today’s low mortgage rates.
How does it work?
First time homebuyers need five percent of purchase price to qualify for a traditional mortgage. There are options that enable you to obtain zero down payment mortgage. They include; borrowing the down payment through a loan or unsecured line of credit, “cash back” mortgage that provides cash after closing and gifted down payment from immediate family member.
Talk to one of our Finser Mortgage Expert to see if this makes sense for you considering your situation and future goals.
We make you aware of all the details associated with “cash back” mortgage. Such as “cash back” mortgage comes with a higher interest rate, and if you want to payback “cash back” or take prepayment option before the end of the term you are required pay back a pro-rated amount of “cash back” received. Or if down payment is borrowed, the loan payment has to be factored in qualifying for the mortgage. With this you may not qualify for a large mortgage. An additional 1.5% is required to cover closing costs.
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