Getting a no down payment mortgage, a good idea?

CharlieBread

New Forum Member
Registered
Hello everyone, I did hear about the option of buying a home with no down payment in Ontario so I did try to learn more about it and I found a blog here that contained a lot of information on how I could buy a house by getting a no down payment mortgage as well as the pros and cons of getting one. I'm trying my luck though if anybody here has already given this a try, is it a good idea? It's something that I'm really considering so any advice or tips that you could give would be very much appreciated. Thanks in advance!
 
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Thomas Beyer

Senior Forum Member
REIN Member
That is a 5% cash back offer for a personal residence ? At what interest rate ? For an investment property you need 20% down. Less for a personal residence if cmhc insured.

Send us more details but assume it will not work.


Sent from my iPhone using myREINspace
 

Bryan Anderson

Real Estate Professional
REIN Member
I've just read the book, Wealthy Code, by George Antone. Great, easy read, related to this question and will give you some great indicators to determine if a 100% finance is the right finance structure for you.

Highly recommend the read before making this decision.
 

Thomas Beyer

Senior Forum Member
REIN Member
I've just read the book, Wealthy Code, by George Antone. Great, easy read, related to this question and will give you some great indicators to determine if a 100% finance is the right finance structure for you.

Highly recommend the read before making this decision.

Is that a US based book?

100% financing is not an option for most people in most markets in Canada today. It does exist in severe stress situations in depressed markets, on occasion. Where are those in Canada today.

You can make enough money in Canada with at market or slightly below market offers with 20% down.

Focus on that.

You can’t build a career expecting home runs, not in baseball nor in real estate. They do happen from time to time though if you step up to the plate enough.


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
 

Bryan Anderson

Real Estate Professional
REIN Member
Hi Thomas - Good question!

The principles in the book would apply in any market as it's less about should you, or shouldn't you, finance a property 100% and more about how an investor can assess the best structure for the deal, for the best return, with the lowest risk, based on a number of indicators, including:

- Leverage impact (Positive, Negative or Neutral leverage)
- Spread
- Cap rate (excluding loan payment) vs loan constants (loan payments)
- Interest rate vs appreciation
- Debt coverage ratio
- Appreciation vs Cashflow vs Cash influx (ie. day job)

I found the read to offer some good nuggets which I've applied in my standard process for assessing an opportunity. For anyone asking the question about what the right finance structure should be for them, this book will certainly help empower them through the decision process.

To clarify; I do not represent the author of the book, or have any affiliation with the book or author.

I hope this helps!
 
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Thomas Beyer

Senior Forum Member
REIN Member
Hi Thomas - Good question!

The principles in the book would apply in any market as it's less about should you, or shouldn't you, finance a property 100% (if you can find a lender(s) to finance at 100% that is) and more about how an investor can assess the best structure for the deal, for the best return, with the lowest risk, based on a number of indicators, including:

- Leverage impact (Positive, Negative or Neutral leverage)
- Spread
- Cap rate (excluding loan payment) vs loan constants (loan payments)
- Interest rate vs appreciation
- Debt coverage ratio
- Appreciation vs Cashflow vs Cash influx (ie. day job)

I found the read to offer some good nuggets which I've applied in my standard process for assessing an opportunity. For anyone asking the question about what the right finance structure should be for them, this book will certainly help empower them through the decision process.

To clarify; I do not represent the author of the book, or have any affiliation with the book or author.

I hope this helps!

In theory there’s no difference between theory and practice.

In practice, there is !


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
 

bhupinderbhatti

New Forum Member
Registered
Hello everyone, I did hear about the option of buying a home with no down payment here in Ontario so I did try to learn more about it and I found a blog here that contained a lot of information on how I could buy a house by getting a no down payment mortgage as well as the pros and cons of getting one. I'm trying my luck though if anybody here has already given this a try, is it a good idea? It's something that I'm really considering so any advice or tips that you could give would be very much appreciated. Thanks in advance!
Thanks for sharing such good information. This information will help a lot of people.
 

myles29

New Forum Member
Hi OP! I read a blog about getting a mortgage with no down payment and based on what I read, I personally think that it's a good idea if you meet the requirements. Getting a no-money-down mortgage here in Canada requires excellent credit score (obviously), stable employment with regular income, enough money for closing fees, and an acceptable debt ratio. Here's where you can learn more about it by reading the full blog, I feel like all the information they shared in there would help you make a much more informed decision.
 
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