With as little as five per cent down pay-ment, from personal or other sources (see below for eligible other sources), all home buyers have access to mortgage insurance enabling then to enter the housing market, as long as they can manage the costs of home ownership.
Details
Mortgage insurance for 95 per cent mortgages is available to both first time and repeat home buyers. Homebuyers have the option of using personal sources, such as savings or gifts, or other sources, such as lender incentives, borrowed funds/credit, or sweat equity (the amount of money spent to help construct the home) for the required five per cent down pay-ment.
Buyers using the Program may con-sume up to 32 per cent of their gross monthly household income for pay-ments on loans for 95 per cent of the lend-ing value of the house where the five percent down payment comes from other sources will be 2.9 per cent of the mortgage loan. This premium can be added to the mortgage.
The maximum amortization period is 25 years.
Insurance premiums on loans for 95 per cent of the lending value of the house where the five percent down payment comes from personal sources will be 2.75 per cent of the mortgage loan. Insurance premiums on loans for 95 per cent of the lend-ing value of the house where the five percent down payment comes from other sources will be 2.9 per cent of the mortgage loan. This premium can be added to the mortgage.
Borrowers are required to demon-strate, at the time of application, their ability to cover closing costs equal to at least 1.5% of the pur-chase price.
Where the minimum equity require-ment is being met by way of a finan-cial gift, the funds must be in posses-sion of the borrower 15 days before making an offer to purchase.
