Buying a home will most likely be the biggest expense you ever make, which is why it is important to have a substantial amount of savings and are organized with your finances before you make such a commitment.
Making sure you have enough money to pay for your down payment is one of the most important factors for any new or seasoned home buyers. Your down payment is a specific price, usually in the form of a percentage, that is from your home’s overall appraised value.
So, to help you get started in searching for your dream home, your local Hamilton mortgage broker with Mission 35 Mortgages has listed ways to purchase a home in Canada with a minimum down payment.
Down Payment Requirements
There are strict down payment requirements in order to get approved for a mortgage. If you do not meet these requirements, your mortgage broker will be more likely to deny your loan request.
In Canada, if you are purchasing a home that is $499,999 or less, there is a minimum 5% down payment requirement. If the home you are purchasing is between $500,000 and $999,999 then you will be required to make a down payment of at least 5% for the first $500,000 and 10% for the remaining amount. For homes $1 million or more, the minimum down payment requirement is 20%.
Unfortunately, if you can only pay 4.99% of your home’s down payment or less, you will not be approved for a mortgage in Hamilton. Therefore, start saving now to prevent this letdown from occurring.
Mortgage Default Insurance
Hamilton mortgage brokers state that the average down payment requirement is 20%. If you do not have enough money to pay for 20% of your home’s down payment then you will be required to obtain mortgage default insurance since you will be considered a high-risk borrower. This insurance is a way for homeowners with a lower income to still obtain a mortgage and have their dreams of homeownership come true.
Mortgage default insurance is an additional fee that is required by brokers so they are protected in case the borrower were to default on their payments. This fee could be a one-time upfront charge or could be added on top of your mortgage payments every month.
Although this insurance is an additional fee, it is an excellent option if you can only afford to pay the minimum down payment requirement.
For more information on ways to purchase a home with a minimum down payment or to get started on your application for a mortgage in Hamilton, please contact the Mission 35 Mortgages team at 905-574-5255.