Zero Down Payment?

Zero DownIt may sound funny, but I get asked all the time if you can still purchase a home with nothing down. I hate to be the bearer of bad news but gone are the days when you could buy a house with virtually no down payment.

No money down mortgages became available in 2006 when Genworth Financial and CMHC introduced mortgage default insurance for 100% financing. If you’re looking for a no money down (“zero down”) mortgage, you’re in for some bad news: these mortgages are no longer available in Canada. As of September 2012, the minimum down payment is 5% and there is no way around this. Thankfully, there are still alternatives such as using your RRSP as a down payment. No RRSP’s? No worries as I know of some creative ways to obtain these and get you into a home sooner. 

There is also a Flex down option in which you can borrow the down payment. Of course you will need to talk to your Mortgage Broker to see what the restrictions are and if you qualify for this.

Another way is to reach out to family. Most parents are overjoyed to hear that their children are buying a home, but even if they are unable to help, the worst they can do is say no.

Selling Assets could be another option. Take a look around your current residence. Put a price tag on everything, and sell the things you don’t absolutely need. You might be shocked to see just how much stuff you have, and how much can be sold on E-Brandon, Kijiji, or at a garage sale. Here’s another point: owning less stuff makes it easier to move!

And lastly, Cut your costs and save up. Just think about all of the things you buy on a regular basis and build a budget around that. Just keep in mind that every dollar you save every month is multiplied by 12 months in a year, and multiplied again by every year you save it. Think long term: A $2 coffee every day before work equates to $2,600 over five years, and a $400 car lease is $24,000 in the same time. (Speaking of car leases, HOLD OFF ON THE CAR until AFTER you get the mortgage!)

If you want to get into your own home and are tired of paying rent don’t hesitate to contact me for more information on how you can get into your own home sooner. It may not be as hard as you think!