1. Flex down / borrowed down mortgageI have access to a lender, at discounted interest rates and no unusual conditions, that allows a client to borrow their down payment on a one to two unit property if they live in a unit. (For example, a duplex where they live in one unit and rent the other) A client can use a credit card, line of credit, personal loan, family loan and so on for the down payment and the lender will lend the rest.2. Owner occupied rentalA client that is living in a unit of a 2-4 unit rental can put down as little as 10%. This mortgage will be using a mortgage insurer (i.e. CHMC) and therefore a client will have to pay their fee and also meet the mortgage insurer’s guidelines to qualify. Lenders will typically use only 50% of the rental income from the other units. Also, many lenders will want to see that there is a vacant unit on closing that the purchase can move into.3. Combing a first and second mortgageI am able to review with clients a first and second mortgage option totalling up to 90% loan to value and with that, the client would put down 10%. As one lender is not lending more then 80% of the value of a property, a mortgage insurer (i.e. CMHC) is not involved and therefore a client does not need to be bound to their guidelines and pay their fee. This also may assist clients in qualifying for a larger price range. Furthermore, the lender can typically use more then 50% of the rental income.
Thursday, September 8, 2016
Buying an investment with less than 20% down
Typically clients need to have 20% or more down on a rental however with these solutions they can (if approved) buy a rental with less then 20% down.
Andrew Thake, Mortgage Agent
Ottawa Mortgage Man