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Five Per Cent
Down Payment Program
With as little as
five per cent down payment, from
personal or other sources (see below
for eligible other sources), all
home buyers have access to mortgage
insurance enabling then to enter the
housing market, as long as they can
manage the costs of home ownership.
Details
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Mortgage insurance for 95 per
cent mortgages is available to
both first time and repeat home
buyers. Homebuyers have the
option of using personal
sources, such as savings or
gifts, or other sources, such as
lender incentives, borrowed
funds/credit, or sweat equity
(the amount of money spent to
help construct the home) for the
required five per cent down
payment.
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Buyers using the Program may
consume up to 32 per cent of
their gross monthly household
income for payments on loans for
95 per cent of the lending value
of the house where the five
percent down payment comes from
other sources will be 2.9 per
cent of the mortgage loan. This
premium can be added to the
mortgage.
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The maximum amortization
period is 25 years.
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Insurance premiums on loans
for 95 per cent of the lending
value of the house where the
five percent down payment comes
from personal sources will be
2.75 per cent of the mortgage
loan. Insurance premiums on
loans for 95 per cent of the
lending value of the house where
the five percent down payment
comes from other sources will be
2.9 per cent of the mortgage
loan. This premium can be added
to the mortgage.
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Borrowers are required to
demonstrate, at the time of
application, their ability to
cover closing costs equal to at
least 1.5% of the purchase
price.
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Where the minimum equity
requirement is being met by way
of a financial gift, the funds
must be in possession of the
borrower 15 days before making
an offer to purchase.
For more information call CMHC at
1-800-668-2642 or access through
CMHC
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