Questions about Mortgages

[Tinkerbella]

Hi everyone!

Can anyone shed any light on the minimum % downpayment a bank would require on say, a $180,000 home with a credit score of 700? Thanks in advance!

[MortgageQueen]

5% = $9,000.


This is what's called a high ratio mortgage which means you will have to pay for it to be insured. For a mortgage of $171,000, that cost should be $5,386. (but it will be added to your loan)
KEEP IN MIND insurance premium will have HST applied and you can NOT add that to the loan


Do keep in mind all the other factors.
Income
How long employed at job,
All taxes filed and up to date
Other debt obligations (i.e. car loans, high balances on cred. cards)

You will need to qualify to support debt you have (and will continue to have)
Insurer will include $100 min. for heat each month
ALso your property taxes will be included in costs, of course

If you need help just pm me. Best wishes!

[themortgageguy]

Hi everyone!

Can anyone shed any light on the minimum % downpayment a bank would require on say, a $180,000 home with a credit score of 700? Thanks in advance!

Hi Tinkerbella,

Rather than explain all the details of the requirements, I've put a link below that will direct you to the CMHC website that provides an excellent explanation of the requirements for insured mortgages for purchases. It includes a program summary document as well as a presentation. You shouldn't have to do any guessing after following the link. If you still have questions just post them.

Hope it helps,

Rob

http://cmhc.ca/en/hoficlincl/moloin/hopr/hopr_004.cfm

[brunt]

OK, I'll be the wet blanket here.

I'll be blunt - you are asking the wrong question. Rather than asking "what is the minimum down payment", you really should be asking "can I really afford a house when I can't come up with a reasonable (i.e. well over 5%) down payment?".

I'm not meaning to come across as a jerk. But I really, really think that you should sit down and think long and hard about this. And I don't mean "I really want this house, and this is the only way I can afford it".

[Retiree]

I agree with Brundt. There is a lot more to owning a home than just the mortgage payment. On top of the mortgage payment there are the taxes, insurance and repairs and maintenance, to name a few.

I wouldn't have wanted not to own a house when our kids were growing up and there is definitely an emotional pay back to being a home owner but I can say that living in an apartment for the past 3 years has been a lot less expensive. It is a very nice apartment and the rent includes the utilities. This makes budgeting very easy. On top of that, our tenant insurance is about 1/3 of what our homeowners' insurance was. If we need a repair, we simply put in a work order and someone comes and does it.

[MortgageQueen]

I think you have very good points Retiree, but really they are coming from someone such as yourself at a different time of your life.
Its a strong human desire to have roots and a home of your own, especially if you have or expect to have children.

I mostly agree with you Brunt, but there are actually people out there that can afford the payment and maintenance of a home despite only putting 5% DP. But I think you are referring to the ones that are buying outside of their resources, and this is where I agree its a dangerous proposition.

[Retiree]

I agree, MortgageQueen. Part of the driving force in moving toward home ownership, as it was with us, is the prospect of setting down roots and raising a family in a place we can call our own.

My only point, really, is that when it comes to affordability there is a lot more to consider than just the mortgage payment.

[Aztec]

If you are only doing 5 percent down as a minimum remember to also put aside the cost of the cmhc insurance, the cost of an appraisal most likely (depending on you lender), land transfer fees and closing costs.

Good luck!

[MortgageQueen]

If you are only doing 5 percent down as a minimum remember to also put aside the cost of the cmhc insurance, the cost of an appraisal most likely (depending on you lender), land transfer fees and closing costs.

Good luck!

CMHC is tacked onto your mortgage . You don't have to pay it separately.

[Tinkerbella]

Well before you get a head of yourself, I did not say I didn't have enough for a down payment.
I personally feel that 20,000 should be enough.

OK, I'll be the wet blanket here.

I'll be blunt - you are asking the wrong question. Rather than asking "what is the minimum down payment", you really should be asking "can I really afford a house when I can't come up with a reasonable (i.e. well over 5%) down payment?".

I'm not meaning to come across as a jerk. But I really, really think that you should sit down and think long and hard about this. And I don't mean "I really want this house, and this is the only way I can afford it".

[Aztec]

That can be done as well, just plan to have the 5 percent of the cmhc cost over and above your purchase price.

[tjthemanto]

https://www.alterna.ca/SharedContent...ntMadeEasy.pdf

Easy to understand mortgage basics, precise & concise ..for anyone interested

[tjthemanto]

It depends on your income & how much mtg you qualify for..and also how much other debt you have.

so you can get away with the minimum 5 % if all the above things are favorable in addition to a good credit score.

[Zeppelin89]

Hi everyone, also trying to figure out these online Bank MORTGAGE AFFORDABILITY TOOLS, hoping someone can give me some answers! Trying to do some financial planning.

So each tool online is a little bit different, anyone know which is the most accurate? ex. TD asks for credit limit on c.cards while CIBC simply asks for C.card payments?
Most tools only ask for heating but what about hydro, water ?
Does anyone know where OSAP fits? Do you put the whole lump sum osap loan amount into lines of credit ? Or do you put it under monthly loan payments?
How does do these tools accommodate for living expenses? Is that what they are looking for when they ask for C.card payments? Or is that simply asking for c.card payments towards loans and not actual living expenses (Food, Gas, e.t.c)

Current Situation:

Gross Income: 70,000
OSAP Loan amounts: approx 40,000, monthly payments of approx $500/month

No other loans
Living Expenses approx: $1000 (Gas,groceries,entertainment e.t.c)

Downpayment: 5% (min possible)

Thanks for the help folks. Looking to figure out how far we are from realistically applying for mortgage.

[lucy16076]

I have to wonder if buying is the answer. If buying a home means "putting in roots" & having "something to call their own" ........ then so be it, but in my opinion if you can't pay cash for a house, it's not "yours" & putting roots into someone else's (the banks) home, doesn't make sense. We are raised to marry & buy a home to raise kids in ................ but rarely do people buy their homes outright, therefore making the dwelling someone else's until they see that zero balance owing............all it appears to be is a forced savings program with poor returns...........housing profits will not likely create returns as they had prior to 2008, so investing money into a home concerns me. We pay lawyers fees to buy, mortgage interest, land transfer tax, property taxes, increased utilities, & then all the upkeep costs of owning a home ( ie lawn care, roof, general upkeep, paint, gardens, etc etc). The cost of owning a home seems never ending....all in the name of "owning something & putting down roots."

Truly contemplate all angles before buying a "home to call your own." Most, not all,but most people "rent" from the bank to have these "roots" (myself included)........if you decide to buy, put as much down as you can & work to pay it off quickly so it truly is "yours to root into!"

Just my 2 cents....