While technically insurers (ie: CMHC) do not allow for “no down payment“, there are a few options that are allowed. Did you know that you can borrow your down payment and closing costs from a credit card, unsecured line of credit, or loan? Not all lenders will allow this, but as a mortgage broker I know all the lenders that do and you still get the BEST rates just like the bank rates. There are also mortgages that have a "cashback" component that can be used towards closing costs (legal fees and property transfer taxes) BUT NOT DOWNPAYMENTS>
For many consumers, saving $10,000 to buy a $200,000 condo would take them years! However, if you have a good job and good credit you can borrow the funds to get you into the market…why?
Why would you want to do that?
Well if you’re reading this post, it’s likely you know saving is going to be tough.
The mortgage rates are SO low and the condo prices are SO good.
Payments on $200k mortgage, at 2.99%, 25 year amortization is about $945.47 per month. That’s cheaper than renting in most cases and in 5 years you may have a nice profit of over $45,000 (estimated based on 2% property value increase per year, monthly payments). *as of Jan 2015
What can you buy for $200k? Depending on where you live; a nice 2 bedroom, 900 sqft condo in Langley/Surrey or 1 bedroom over the river in Coquitlam/Burnaby/East Vancouver areas. In Abbotsford you can buy a 2 bedroom townhouse!
How about a gain of $46,000 or higher in cash, in the bank… in 5 years if you sell! It might be your stepping stone to moving to a house. This would be higher IF you go with bi-weekly accelerated payments! Lets' see what the numbers look like:
Gifted from Mom/Dad
Sale of Existing home
Borrowed from Line of Credit