Now that we are officially in the New Year, this is an excellent time to make your dreams of homeownership come true. Saving enough money to buy a home and pay for your down payment can be difficult regardless if you are a first-time homeowner or a seasoned buyer. So, to help you get started on paying for your dream home, your local Burlington mortgage broker with Loewen Group Mortgages has listed ways to purchase a home with a minimum down payment.
What Is A Down Payment
When you begin the home buying process and find the house you want to purchase, you will be required to pay for that home’s down payment. This payment is a percentage of what the home’s total value is and is owed before you can close on your home.
Down Payment Requirements
Depending on how much you can pay towards your home’s down payment may affect what type of mortgage you can be approved for. To qualify for a Burlington mortgage, you will have to pay at least 5% towards your down payment. However, if you pay below 20%, your broker will require you to pay for mortgage default insurance. This insurance is an additional fee that can either be charged as a one-time payment or it can be added to your monthly mortgage costs.
Mortgage default insurance is required by brokers in case the borrower were to default on their payments. This insurance is only paid for by the borrower but it does not protect them whatsoever.
Using A Gifted Down Payment
If you are struggling coming up with enough money to make a sizeable contribution towards your down payment, you may want to consider the gift option. A gift down payment is becoming more and more popular with first-time buyers and is becoming more accepted by local Burlington mortgage brokers. Receiving a down payment as a gift is where a close family member gives you the money. That way you can avoid paying for mortgage default insurance if your down payment is 20% or more.
For more information about purchasing a home with a minimum down payment or if would like to get started on your application for a Burlington mortgage, please contact Loewen Group Mortgages at 289-337-4029.