• Many renters feel they cannot afford to purchase a home because they have not saved for a down payment.  There are solutions available today that can help first time buyers with their down payment.

    The minimum down payment is 5%. Many lenders allow for a gifted or borrowed down payment.  Some lenders offer a cash back option that can be used for your down payment.  

    Gifted down payments are provided by an immediate family member. The family member must sign a letter showing the amount of the gift and that no repayment is expected.

    If you have excellent credit and very little debt, but have access to a line of credit or a personal loan, you may be able to borrow the down payment. The loan will have to be accounted for in the debt servicing ratios.  You will need to have 1.5% of the purchase price saved to show you can cover the closing costs.

    Some financial institutions offer a “free down payment” or “flex down” program. This covers your down payment. You do pay a slightly higher interest rate. But this program will allow you to invest in home ownership and start accumulating equity earlier. You must remain with the original lender for the full initial five year term or you will have to pay back the down payment.

    There is also the RRSP Home Buyers Plan option.  If you are a first time home buyer you can withdraw up to $25,000.00 from your RRSP tax free to purchase a home.  This is for owner occupied property purchases only. You must repay the RRSP within 15 years, commencing no later than the second year in which the withdrawal was made.

    There are many options available to those wanting to buy their own home.  It is important to speak to me, a mortgage professional. I will provide you with the education and support to help you make an informed decision.

    I look forward to working with you soon.  Enjoy your spring day, Karen