Don’t be discouraged by no money for down payments or banks turning your mortgage down. There are alternatives. Give Red Door Home Solutions a call and get started on the road to home ownership!
Many Canadians have a lack of savings but still want to buy a home.
In 2008, Ottawa disallowed the Canada Mortgage and Housing Corporation to insure 100% financing.
Some lenders tried to get around that by having you put down 5% and then giving it back to you in exchange for a higher mortgage interest rate.
That was stopped in 2012 by Canadian regulators. With the recent boom in Canadian housing, stricter rules have been put into place for borrowing and qualifying to get a mortgage.
If you have bad credit or no credit, you will have an even harder time getting a mortgage. While lenders may overlook a bad credit history if your down payment and income is high enough, few will grant a mortgage to someone with no down payment and bruised credit.
There are some alternatives – like borrowing the down payment from family members or – worse- using credit cards or a line of credit that carries a high interest to get you the down payment money.
If you have a lot of money in RRSPs, you may be able to borrow from your retirement savings –but this is usually not an option for younger home seekers.
Contact Red Door Home Solutions
Another option is to enter a lease to own home program. First, you want to find a reliable and ethical company – like Red Door Home Solutions.
With very little to no down, you can qualify to enter our future homeowners program. You can get pre-qualified and choose a home within your budget in the area of Toronto or elsewhere in Ontario where you want to live.
You make lease payments that are similar to the rent payments you currently make, but part of the payment goes towards your equity – or down payment for the home. This is a great way to get into the home of your dreams and a forced savings plan at the same time!
The lease program is for a set time, depending on how long you need to build up your savings (2-5 years). With a lease to own program, you get to enjoy living in your chosen home from the start. In addition, you can improve your mortgage credit score by paying your lease payments on time each month – making it easier to qualify for lower mortgage interest rates at the end of your lease period.
If you are worried about getting into the hot housing market before prices go up further – this solution is ideal. Your home purchase price is set when you enter the agreement. If the price of the home goes up above that set price, that is your gain once you buy the home. You could be earning equity before you even buy the home!