|
FINANCE OPTIONS
For most people, the hardest part of buying a home is saving the
necessary down payment. Todays lenders offer the opportunity of homeownership
with as little as 0% down.
To qualify for Mortgage Loan Insurance you need to satisfy the
following conditions:
- The home must be located in Canada and considered your
principal residence.
- You must have a down payment of at least 5% of the purchase
price of the property.
- Your home-related expenses must not exceed 32% of your gross
household income.
- Your total monthly debt load must not exceed 40% of your
gross monthly income.
- You must be able to pay closing costs equivalent to at least
1.5% of the purchase price.
(This is estimated cash needed for legal fees, building
inspections, appraisals, etc.)
Mortgage Loan Insurance to lenders provides protection from the
risk of payment default. The fees for this insurance are payable by the Buyer
and are generally added to the principal amount of your mortgage and amortized
over the life of the mortgage (i.e. 25 years). The fees are as follows:
| AMOUNT FINANCED |
CMHC FEE
(based on % of mortgage amount) |
| Up to 65% |
.50% |
| Up to 75% |
.65% |
| Up to 80% |
1.00% |
| Up to 85% |
1.75% |
| Up to 90% |
2.00% |
| Up to 95% |
2.75% |
| Traditional Down |
2.90% |
Payment Flex Down
Up to 100% |
3.10% |
Example: A home purchased at $200,000 would require $10,000 as
down payment and $3,000 available for closing costs. The mortgage needed would
be $200,000 - $10,000 = $190,000. The fees would be 2.75% of $190,000= $5,225.
The total mortgage financed on the home would be $190,000 + $5,225 = 195,225.
|
