Yes in fact there is just such a product available, and in fact there are really 2 separate means by which you as a mortgagor can achieve the same end result. Both methods are institutional(and I choose this word carefully) . The first example of 100% financing will deal through the third party mortgagee insurance CMHC or GE Capital.

Please contact us for a no charge consultation" that we can understand your individual situation and assist.

Option One - 95% + 5% = 100%

To begin, separate from mortgage life insurance or home, property, fire and casualty insurance, mortgage insurance provides protection to the institution as a lender in the event of a default.

If the amount of the mortgage exceeds 75% of the lending value of the mortgaged property, the mortgage is considered a "high ratio" loan and therefore subject to be a "perceived risk". Accordingly, and as required by law, mortgage insurance must be purchased for the full amount of the mortgage (not the full amount of the purchase price). Mortgage insurance is available from CMHC and GEMICO and it is generally the institutional lender who will choose between the 2 and make the application. The premium is subject to PST 8% tax which is required for payment at time of closing.

An application fee and an insurance premium (which can be added to the mortgage amount) are due to the insurer.

In some cases an institution may require a mortgage to be insured even if the loan-to-value ratio is less than 75%. For example, the Bank may require insurance as a condition of the loan if the property is considered higher risk (e.g. the home is in a highly volatile real estate market, or may be difficult to resell).

All purchasers of owner occupied homes qualify to apply for 95% institutional first mortgages. Additionally, you do not have to be a first time homebuyer. Many people think they do but you don't. Third party lender insurance is generally required for this product. However there are several institutional lenders that charge their own fee on top of the mortgage loan, no third party involvement. To qualify you must meet the following guidelines.

Finding Down Payments Just Got a Lot Easier (CMHC)

OTTAWA, February 23, 2004 - Home buyers, will have greater choice in what they can use for a down payment, thanks to new options announced today by Canada Mortgage and Housing Corporation (CMHC).

Borrowers are normally required to have a minimum five per cent down payment from their own resources to purchase a home. However, CMHC has expanded eligible down payment sources to enable many Canadians to realize their homeownership dream sooner than what would otherwise be possible.

Effective March 1 2004, the down payment can come from any source such as, lender incentives and borrowed funds. However, borrowers will still have to prove their ability to meet their debt requirements in order to qualify for mortgage insurance.

Under the new product, lenders will be able to offer Canadians a variety of mortgage product offerings including mortgages with terms as low as six months and fixed, adjustable and capped interest rate loans.

Summary:

On the global assumption we qualify, we can get institutional financing (insured) up to 95% on a purchase and "borrow" the remaining 5%. Now you know why I chose the word "primarily" very carefully in the first paragraph.

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Option Two - 100% Institutional Mortgage; Purchase, Refinance, Debt Consolidation

Effective Oct 2006: Institutions such as Scotiabank and others have introduced a pure 100% mortgage as qualified through mortgage insurance. This provides borrowers with a NEW opportunity to mortgage financing supplemental to the qualified lenders as described below. Please understand that some of the the qualifications through Scotiabank (and others) on this NEW product are different than the qualifications listed below.

The 100% mortgage financing program is available in most Canadian cities and towns within a short driving distance to major urban markets. The maximum loan amount is currently $500,000 with the 100% financing portion applicable to the first $400,000 (see below). The program requires full income proof (employment letter and the most recent pay-stub) and you will need to be with your present employer for a minimum of 2 years. If you are self-employed you will need to qualify by averaging your taxable income for the past two years (line 150 on your tax return and your business financial statements must show a positive trend.

This product requires a clean credit payment history for the past 12 months, minimum. If there are currently any late payments you may not qualify for the 100% financing and may be limited to the 90% or 95% alternative mortgage products. Contact us.

100% mortgage refinancing is the only true mortgage which can consolidate all your bills into one monthly payment and despite the cost of getting out from your existing mortgage and paying a 4% lender administration fee (added on top of the basic loan) plus legal and other closing fees - it will cut your monthly payments by up to 40% or more!!

No money down mortgages range from $75,000 to $400,000. Houses or Townhouses (freehold or condo) only. You can even get a mortgage of $500,000, but must put down 20% on the balance between $400,000 and $500,000. Meaning, you can buy a $500,000 property with only $20,000 down.

It may be that it is cheaper to get a "no money down" mortgage than one with 5% down!?
Contact us and let us do the comparison for you. Free with no obligation.

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