Will I need a down payment to buy a house?
Posted on Jan 15, 2018 in Mortgage Market Updates and News
This is a question I get asked all the time. Saving for a down payment is such a challenge; especially in markets like ours where rents have gotten incredibly high, it makes finding money to put aside each month even more difficult.
So do you need a down payment to buy a home? The short answer is yes. No matter which lender you go with, whether you go through a bank or a mortgage broker, you will need to have a down payment of some sort. But let’s talk about amounts.
The standard down payment that’s required is 5% if you’re planning to live in the house (even if you’ve owned before and are not a first time home buyer). So on a $200,000 home, you’d be looking at needing a $10,000 down payment. But! Are you a first time home buyer? Because if you are, there are a number of programs available for you, specifically one that is a huge help for your down payment.
‘The BC Home Buyer Mortgage and Equity Partnership’ is basically a down payment loan. It provides you with up to half of your down payment (with some restrictions). So if you need $10,000 for your down payment, the program above will lend you $5,000 of that leaving you with just $5,000 to come up with on your own.
So as a first time home buyer in BC right now, you need to come up with about 2.5% of a purchase price on your own to buy a home. Your portion of the down payment *can* come from a gift or loan from a family member, or several other sources. That said, the more money you can show a lender you’ve been able to save, the stronger your application is, and the more likely you are to actually be approved. Lenders do realize it’s a difficult time to get into the market so programs like the down payment loan, are there to be used. Don’t let needing them discourage you from applying for a mortgage, just know it’s always better if you can show savings as well.
If you’re wondering if you’ll qualify for a mortgage based on your current situation please give me a call or email to sit down and see where you’re at. There is no charge to you for my services.
For more information on down payment rules see my earlier blog post http://www.portalbernimortgage.com/blog_article.php?pid=882
TMG The Mortgage Group Canada Inc.
RE/MAX Mid-Island Realty