Clarification on new mortgage rules

[cailmoney]

Hey everyone, so I was just a little confused on these new mortgage rules... It says you need 20% down for investment properties, now is this just through banks? or can I still go through a mortgage broker to find me something for 5% down. ?

Thanks in advance

 

[crystalm000]

In my recent experience, if the property is going to be non owner occupied, you will require 20% down whether you go with a bank directly, or through a mortgage broker...the mortgage broker connects you with lenders/banks, so the rules still apply. The broker will shop around for you to find you the best rate/terms, however 20% down seems to be the new norm now, even before the rules `officially` apply on April 19. We bought our rental property in mid-March non owner occupied, and we weren`t given an option - it was 20% down or no mortgage...I wonder if others are finding the same as well?

 

[MonteDobson]

20% down is the new rule for non-owner occupied investment properties, regardless of the lender, mortgage broker or bank.

 

[cailmoney]

That`s too bad for me I guess! But thanks for the answers

 

[Thomas Beyer]

QUOTE (MonteDobson @ Apr 11 2010, 08:54 PM) 20% down is the new rule for non-owner occupied investment properties, regardless of the lender, mortgage broker or bank.
unless an apartment building where occasionally 15% down is still doable in some cities at the right purchase price .. or with a 2nd mortgage if 1st mortgage lender approves it !

 

[Gen1GT]

What percent down payment is required to bypass the CHMC altogether?

 

[2ndstory]

QUOTE (Gen1GT @ Apr 13 2010, 05:33 AM) What percent down payment is required to bypass the CHMC altogether?

20%.

CMHC is still insuring income properties if you have less than three insured mortgages. The biggest change for investors is the 50% vs 80% income offset.

Nik

 

[MikeMcCrae]

A property can be bought with less than 20% down. A first mortgage can only go to 80% but if you can find a second mortgage lender then you could get in with less then the 20%. As always talk with your mortgage broker for the best in mortgage products.

 

[RobMacdonald]

QUOTE (2ndstory @ Apr 13 2010, 06:50 AM) 20%.

CMHC is still insuring income properties if you have less than three insured mortgages. The biggest change for investors is the 50% vs 80% income offset.

Nik

You have to be careful. Every day I come across another investor that has the new rules changes all mixed up. The TDSR rule changes only apply to mortgages that have to be udnerwritten by CMHC. So if you are buying a high ratio residence, and have rental properties then the new rules apply. If you happed to be buying a rental with 20% down, but the bank requires CMHC insurance, then the new rules apply.

If you are putting 20% down, with most of the banks not much has changed. The DCR program through firstline is still avaiable, but has changed somewhat. Scotiabank still offers a 70% offset.

So work with a mortgage broker that is familiar with all the options in the industry.

 

[jashaw11]

QUOTE (MikeMcCrae @ Apr 19 2010, 04:26 PM) A property can be bought with less than 20% down. A first mortgage can only go to 80% but if you can find a second mortgage lender then you could get in with less then the 20%. As always talk with your mortgage broker for the best in mortgage products.


This is the part I am not certian of. I understand that you can only have a maximum of an 80% CMHC insured mortgage?

In contrast am I free to generate the final 20% any way I wish?

I can obvyously use cash so a JV or "family gift" is a go but what about Equity credit on another property? What if the seller takes back 20% or if I negotiate a defered baloon payment for 20% or more. How are these other "more creative" forms of financing viewed by the CMHC when I apply for a loan?

 

[Thomas Beyer]

QUOTE (jashaw11 @ Jun 3 2010, 06:25 PM) How are these other "more creative" forms of financing viewed by the CMHC when I apply for a loan?
They will not be allowed before closing .. unless cash .. and cash has to be shown to be in bank for 3+ months ..

better to add a mortgage later .. say 6 months after ownership in 2nd position !

Buying an investment property with less than 20% down is VERY HIGH RISK, possible cause for much misery and a likely premature end to a potentially lengthy real estate investment career !!