After Oct 15th 2008 the (official) 100% Financing Program was eliminated.  However there are a number of ways you can still buy with No money down (but not the way you see it in the TV commercial)

There are always “gift letter’s” where an immediate family member provides you with a gift, to be used for your 5% down payment and even closing costs.  In fact, we could take this a step further, and combine it with various ‘Cash Back’ mortgages that on or after closing, can provide you with up to 5% cash back.  This way, should you choose to give back that gift to a family member at a later date you can do so…  There is nothing stopping you from doing what ever you like with that extra money.


For salaried individuals, employment letters, recent pay stubs and/or T-4 slips are fine.  For self employed individuals, two years Notice of Assessments along with your most recent T-1 G’s.  Either way the bank will also require proof that you have access to the down payment by way of photo copies of investment statements or bank accounts showing a 3 month history.

There is not an exact number that we can give you. You will have your lawyers fee, plus disbursements, land transfer taxes, and sometimes property tax adjustments.  If you are buying new construction, you will also have various hook up fees and levies.  We recommend that you take the purchase price of your home and set aside 2% of the purchase price as an estimate for your closing costs.  Your lawyer can and will give you more specific numbers closer to your actual possession date.

The amortization of your mortgage can have a huge effect on both the amount of interest you will repay over the life of the mortgage as well as the monthly payment.  A typical $200,000 mortgage @ 5.25% will have a monthly payment of $1,191.84/month based upon a 25 yr. amortization. That same mortgage amortized over 35 yrs. will have a lower payment of $1,043.19 but will cost you an extra $32,200 in additional interest payments over the life of the mortgage.

The fact that you are even at this site suggests that you are serious about obtaining a mortgage, so lets get you pre-approved now.  There are two steps to a pre-approval.  The first step is to determine what your upper limits are when applying for a mortgage so you can focus on specific properties.  The second step is to guarantee a rate ahead of time and identify any potential issues early in the pre-approval process.  This way it ensures you that you receive the lowest interest rate between the time of the pre-approval and your closing date and you won’t have issues on the 11th hour trying to waive a condition on financing once an offer has been accepted.

Many clients assume that we have some magic lender or source for our mortgage funds to provide these discounted rates.  It is true that we do have some lenders who are not accessible to you, however people are often shocked when we tell them that their own bank may be one of the lenders that we act as agents for!

First Time purchasers who have never had an interest in, or owned a home anywhere in the world, and intends to occupy the home as your principal residence within 9 months of closing are eligible to participate.  The maximum amount of the refund is $2,000 and qualifying taxpayers may claim an immediate refund at the time of registration by registering electronically or by filling out and registering on paper with their solicitor.

The choice of mortgage terms varies widely – from Fully-Open, right up to 25 year terms.  Usually, the shorter the term of the mortgage the lower the interest rate.  The longer the term, the higher the rate.  The standard benchmark has always been the fixed five year mortgage and they seem to be what most home buyers typically choose, but you may consider shorter-term mortgages if you have a higher tolerance for risk, or if you are not prepared to make a long-term commitment right now.  Here are some suggestions that might be useful to consider when making a choice as to the term of your mortgage.  Ask yourself the following questions:

1. Do you plan to sell the house in the short-term without buying another?  If so, a short mortgage term may be the best option.

2. While looking at today’s economic environment, do you think interest rates have bottomed out and the focus is on Inflationary pressures?  If that’s the case, then a longer mortgage term may be the right choice for you (perhaps one tied to a US Presidential election).  Similarly, if you think rates are currently high, you may want to opt for a short or medium term mortgage that might be convertible, hoping that rates drop further by the time your term expires.

3. Are you looking for security?  As a first-time home buyer your focus may be such that a longer term mortgage may help you to budget and manage your monthly expenses. Speaking with a Mortgage Specialist like me can help put things in prospective and help you choose the right mortgage to meet your needs.

The HST will impact both new construction principal residences as well as new construction investment properties.  However, there will be a rebate regardless of the price of the new home.  Visit this link for the details. http://www.rev.gov.on.ca/en/taxchange/homebuyers.html

An individuals, your credit Score has become an important component for lenders to use in their qualifying process. There are companies like creditkarma.ca or borrowell.com that will allow you to view your credit bureau and associated credit score.  This is a first step and together we can review it and offer recommendations for the quickest way to achieve a higher score to help your loan get approved.

Can I Keep My Home if I File a Consumer Proposal?

Yes. One of the key benefits of a consumer proposal is your assets are protected, which means you keep your assets while achieving debt relief. This includes any equity you have in your home.

When you file a consumer proposal, you are working with a Licensed Insolvency Trustee to create a plan to pay off your unsecured debts, such as credit cards, payday loans, and income tax debt. Any equity value in your home will be taken into consideration when calculating how much you should offer. This is because if you were to file bankruptcy any equity would be forfeited to your creditors. However, with a proposal you keep your home and repay the creditors an equivalent home equity amount over a period of time.

Keep Your Mortgage Payments Current

It’s also important to understand that a consumer proposal does not affect secured debt like your mortgage. You will be required to keep making your mortgage payments regularly and on-time. Failure to do so would result in your mortgage lender acting to seize your home due to mortgage arrears.

Moreover, under current laws, a lender is not allowed to cancel a mortgage just because you have filed for bankruptcy or a consumer proposal, if your payments are on time.

Will a Consumer Proposal Impact my Mortgage Renewal?

If your mortgage payments are current and on-time, you should be able to renew your mortgage with your existing lender while you are in a consumer proposal filing. The reason for this is your existing lender usually will not require a new credit application. However, filing a consumer proposal will impact your credit rating. In very rare circumstances, this may affect your ability to renew your mortgage at preferred rates. A lot will depend on your loan-to-value ratio, debt-to-income ratio and personal credit payment history.

Should you decide to switch lenders, or refinance your mortgage, you would need to file a new credit application. Your lowered credit rating would then be under consideration. In this case, it may be a challenge to renew with a new lender at your preferred mortgage terms. They may consider you a lending risk and have you refinance at a higher interest rate or possibly deny refinancing altogether.

Based on our experience, unless you decide to renew your mortgage with a new lender and therefore file a new credit application, a consumer proposal filing should still allow you to renew your mortgage with your existing bank in most cases.

Will a Consumer Proposal Filing Prevent me from Buying a Home?

A consumer proposal does not prevent you from buying a home in the future. While your proposal will appear on your credit report for a short period, there are steps you can take to rebuild your credit and prepare for a successful mortgage application.

As with any mortgage application, your chances of approval are increased if you have a significant down payment already (20% or higher) and a stable income.

In addition, here are some steps you can take to improve your ability to qualify for a mortgage after you have completed your proposal.

Qualifying for a mortgage after a consumer proposal

Because a consumer proposal allows you to lower your monthly debt payments, often quite significantly, now is the time to start building some savings. Consider creating a budgeting plan and direct your savings in debt payments towards a goal like saving for a down payment towards a new home and/or having a stable emergency fund. You should also make it a habit to pay all your bills in full and on-time to build a solid credit history during and after your consumer proposal filing.

Traditional lenders will look for the following in order to be approved for a prime quality mortgage after filing a consumer proposal:

  • A two-year timeline after discharge, over which you have re-established a new, better, credit rating;
  • Two or more new credit facilities (like a line of credit or a small bank visa); and
  • Approximately $2500 in new credit.

While this process requires some patience and discipline, it’s in your best interest to build a large down payment and consistently pay all your bills. This way, you can rebuild your credit rating to qualify for a mortgage at an affordable rate. You can learn more about what you need to do to qualify for a mortgage after filing for insolvency.

What if my spouse has great credit, and only I’m filing a consumer proposal?

If you are planning to buy a home and your spouse has good credit, he or she could apply for the mortgage loan and have you join as a co-signer, if required.

If you’re already a homeowner, and just you or your spouse files a consumer proposal, or you file one jointly, your mortgage will not be affected as long as you are making its payments.