With as little as five per cent down payment, from personal or other sources (see below for eligible other sources), all home buyers have access to mortgage insurance enabling them to enter the housing market, as long as they can meet the standards for a five year fixed-rate mortgage.
Details
• Mortgage insurance for 95 per cent mortgages is available to both first time and repeat home buyers. Homebuyers have the option of using personal sources, such as savings or gifts, or other sources, such as lender incentives, borrowed funds/credit, or sweat equity (the amount of money spent to help construct the home) for the required five per cent down payment.
• Buyers using the Program may consume up to 32 per cent of their gross monthly household income for payments of principal interest, property taxes and heating, and total debt load cannot exceed 40 per cent of monthly household income.
• Buyers using the Program must be able to qualify for a five year fixed-rate mortgage even if they choose a mortgage with a lower interest rate and shorter term.
• Insurance premiums on loans for 95 per cent of the lending value of the house where the five percent down payment comes from personal sources will be 2.75 per cent of the mortgage loan. Insurance premiums on loans for 95 per cent of the lending value of the house where the five percent down payment comes from other sources will be 2.9 per cent of the mortgage loan. This premium can be added to the mortgage.
• Borrowers are required to demonstrate, at the time of application, their ability to cover closing costs equal to at least 1.5% of the purchase price.
• Where the minimum equity requirement is being met by way of a financial gift, the funds must be in possession of the borrower 15 days before making an offer to purchase.
• For homeowners who used the Program to purchase their home, the maximum amount that can be withdrawn if re-financing their mortgage is 85 per cent of the value of their home.
• The Five Per Cent Down Payment Program is not available for non-owner
occupied properties. These properties require a minimum down payment of 20 per cent.
• Effective March 18, 2011, the maximum allowed amortization period for mortgages with less than 20 percent down payment is 30 years.
For more information call CMHC at 1-800-668-2642 or access through
http://www.cmhc.ca/
HST NEW HOUSING REBATES
Program
You may be eligible to claim a rebate for a part of the HST you pay on the purchase
price of a newly constructed home or the cost of building your home if:
• you buy a new or substantially renovated home (including the land or if you lease the land) from a builder;
• you buy a new mobile home (including a modular home) or a floating home from a builder or vendor;
• you buy a share of capital stock of a co-operative housing corporation;
• you construct or substantially renovate your own home, or carry out a major addition (or hire another person to do so); or
• your home is destroyed in a fire and is subsequently rebuilt.
Details
• The purchase price of resale homes are exempt from the HST. The purchase
price of newly constructed homes are subject to HST.
• New home buyers can apply for a 36% rebate of the federal portion of HST applicable to the purchase price to a maximum of $6,300 for homes costing $350,000 or less. For new homes priced between $350,000 and $450,000, the rebate on the federal portion of the HST rebate would be reduced proportionately. New homes priced $450,000 or higher would not receive a rebate of the federal portion of the HST.
• New home buyers can apply for a 75% rebate of the provincial portion of the HST applicable to the purchase price to a maximum of $24,000.
http://www.cmhc.ca/
What are the General Requirements to Qualify for Homeowner Mortgage Loan Insurance?
• The home is located in Canada.
•You will typically have a down payment of at least 5% of the purchase price of the dwelling, depending on the dwelling type. •Single-family and two-unit dwellings (5% minimum down payment)
•Three- or four-unit dwellings (10% minimum down payment)
•Normally, the minimum down payment comes from your own resources. However, a gift of a down payment from an immediate relative is acceptable for dwellings of 1 to 4 units. For eligible borrowers, additional sources of down payment, such as lender incentives and borrowed funds, are also permitted. Check with your lender for qualifying criteria and availability.
•Your total monthly housing costs, including Principal, Interest, property Taxes, Heating (P.I.T.H.), the annual site lease in the case of leasehold tenure and 50% of applicable condominium fees, shouldn’t represent more than 32% of your gross household income (Gross Debt Service (GDS) ratio). Use the GDS form to calculate how much you can afford in housing costs to be eligible.
•Your total debt load shouldn’t be more than 40% of your gross household income. The Total Debt Service (TDS) ratio is your P.I.T.H. + the annual site lease in the case of leasehold tenure and 50% of condominium fees (if applicable) + payments on all other debt / gross annual household income. Add up your costs and determine your Total Debt Service ratio using the TDS form.
•You also need to think about closing costs (for example, legal and land transfer fees) equivalent to 1.5% to 4% of the purchase price. Many first-time buyers are surprised by these costs. That is why, when qualifying for CMHC’s Mortgage Loan Insurance, our Home Purchase Cost Estimate worksheet form will help you calculate your total homebuying costs.
Closing costs include but are not limited to one-time items such as lawyer fees, GST and PST as applicable, land transfer tax if applicable, adjustments, etc., to allow you to complete the house purchase.
•Other requirements may apply and are subject to change. For details, please contact your lender or mortgage broker.
http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_003.cfm
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