5% down payment question

[dylancaharel]

Hello everyone,
So I was informed but someone that you aren’t able to use the first time home buyer 5% down payment option on rental properties and that you can only use the 5% down on a house you will be living in. In not sure how reliable the source is so I’m seeking your input!
Thanks


Sent from my iPhone using myREINspace

 

[Thomas Beyer]

Correct. Rental properties need 20% down.


Sent from my iPhone using myREINspace

 

[Cory Sperle]

It's not just for first time home buyers, but everyone as far as I know as long as you just have one. More than one individual I know personally has done very well by buying with 5% down, living there for a year, renting out, and buying another place at 5% and repeating several times.

 

[Alvaro Sanchez]

https://www.cmhc-schl.gc.ca:443/en/...ment-of-canada-programs-to-support-homebuyers

Hello everyone,
So I was informed but someone that you aren’t able to use the first time home buyer 5% down payment option on rental properties and that you can only use the 5% down on a house you will be living in. In not sure how reliable the source is so I’m seeking your input!
Thanks


Sent from my iPhone using myREINspace

 

[Michel Lafleur]

I understand that you can buy an investment property with 5% down so long as its intended to be your primary residence for the foreseeable future. I know of many guys who bought their first doors that way, lived there a few years then moved on.
If you dont plan to live there, its tough to find a lender who will do it for anything less than 20% down for an investment property.

 

[Matt Crowley]

Yep, 20% down minimum on a standalone investment property. The cool caveat is that if you buy a home a bit out of your price range with a legal suite the bank will count that income towards what you can afford and allow the 5% down. If you are young and mobile this is a great strategy.

When it comes refi time, the bank will need to see that 20% down however if you do a few of these which can happen from a combination of renovations, principal pay down, and market appreciation. Letting the principal balance tick away is one of the most awesome things in the world.

 

[Cindy9233]

One mortgage broker I work with says you may be able to put less down if you have enough equity built up in other properties. I dont know enough about it and can get you her phone number if you'd like. Would like to hear other mortgage brokers thoughts on that too

Sent from my SM-G960W using myREINspace mobile app

 

[Matt Crowley]

^ unless the broker syndicated the loan across properties, probably not, and in aggregate would need to meet the 20% threshold.

Unless you are 20% down, you won't mean the DCR requirements anyway with pricing where it is at so it is a moot point.