Should You Borrow Money to Make a Down Payment on a New Home? + MORE Mar 26th

Saving for a mortgage down payment can be a long and tedious process. According to the Canadian Real Estate Association, the average price of a Canadian home was $540,000 in February, a 15.2% increase compared to a year earlier. You would need to save $108,000 just to make a standard 20% down payment. Faced with rising home prices, some Canadians choose to borrow money for their down payment.
How to Borrow Money for a Down Payment?
Borrowing money for a down payment is certainly possible, though you’ll have to put up some of the money yourself. Lenders require a minimum of 5% of the purchase price up to $500,000 and 10% over $500,000. You may be able to use other loans to help with your down payment, but only after the lender’s minimum requirements are satisfied. For example, if you’re buying a $500,000 home and have $25,000 in savings, you could use a personal loan to cover the rest of the down payment.
Advantages of Borrowing for a Down Payment
With interest rates at historic lows, borrowing for a portion of your down payment might make sense in the right circumstances…

We’ve all heard about the 6 month deferred mortgage payment option.  It was thrown out there by the government in an attempt to help property owners.  We now have some more info that I’d like to share.
I’m getting a little sick and tired of the media being so negative and pessimistic.  The banks and other financial institutions are offering to defer mortgage payments for 6 months. This is GOOD news. While it might not seem that way if you read some of the media posts, let’s clear things up:

 NO, it won’t harm your credit rating.
 NO, it isn’t expensive. Read on…
 NO, this isn’t automatic. Your mortgage payments will not be forgiven for 6 months without calling anyone. But most lenders are happy to postpone your payments without much fuss.

This is for people that have had a change in their incomes. If you are fortunate enough to have a job where you are still working, or you work for the government and there has been no change in your employment or your investment property income has not changed,  please don’t call the lenders…

Last week, the President of the Canadian Bankers Association announced that all six major banks would offer deferral payments on their mortgages and other credit products. Just like many public announcements over the last couple of months, many were left with more questions than answers. One question that still has yet to be answered is, how deferred mortgage payments might affect your credit score? Equifax recently announced, “In the event that a [lender] makes a credit relief or payment deferral […]