Cash back mortgages a thing of the past??
Posted on Sep 12, 2012 in Mortgage Market Updates and News
Although many people don't even realize that Cash-Back Mortgages exist, they have been an excellent tool in helping qualified buyers break into the housing market. A cash back mortgage provides the mortgagor with a % of the mortgage amount (normally between 1 and 7) back in cash, upon completing the mortgage. This cash can be used to pay out debts, pay closing costs, buy furtiture or other necessities for the house, or sometimes use as a down payment for their purchase.
Lately, with all the changes occuring in the mortgage world, there's been talk that cash back mortgage programs would be cut off and disallowed by OFSI (Office of the Superintendent of Financial Institutions).With the government wanting to ensure affordability and readiness of every buyer out there these days, it doesn't make sense to allow people to purchase with no money of their own down. That being said, even without the existance of cashback mortgages, many people still buy with gifted or borrowed down payments.
Yesterday Scotiabank, one of the few lenders left offering a cashback mortgage program, announced that they would be retiring their program effective September 15th, 2012. Although there have been no official changes regulating cash back mortgages, Scotia has taken this step on their own. Will the rest of the lenders follow? We'll see.
Currently, we have access to ResMor (RMG Mortgages), National Bank, and B2B Bank for cashback mortgages.
With Questions feel free to call or email Sharie Marie Francoeur 2507300239, firstname.lastname@example.org
-Sharie Marie Francoeur, Mortgage Professional with TMG The Mortgage Group Canada Inc.