An interesting move regarding rental property financing

For those looking to purchase rental properties, the minimum down payment has been at 20% now for some time, and so it remains. In years gone by, this down payment money had to be proven to have originated from the buyer’s own resources - it could not be gifted.

 

In the case of an owner occupied purchase, the down payment can be gifted from a directly related family member.

The big news from one of our key lenders at the start of July was an announcement that they would now allow gifted down payments (again from a related family member) to be applied to rental property purchases as well.

 

The credit score is a key focus with applicants scoring 740 and up being able to obtain 80% financing on investment

properties with no mortgage insurance premium, no fees, no higher than market rates.

 

For those with a credit score below 740, the down payment must be increased to 25% in order to avoid the mortgage insurance premium, although with this premium 80% financing is possible.

 

This is a program designed to enable the smaller investor to pool resources with other family members and get into the Real Estate market. It opens the door of opportunity for many who have otherwise been locked out of buying additional properties.

Comments:
No comments

Post Your Comment:

Today’s Bank of Canada rate hold announcement marks almost four straight years that the key benchmark rate has remained unchanged, since September 8, 2010. Great news if you have a variable-rate mortgage or home equity line of credit; the prime rate stays at 3%.

 

The announcement noted that “the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished.” With these considerations, the Bank is maintaining its monetary policy stimulus, and remains neutral with respect to the timing and direction of the next change.

 

The next rate-setting day is October 22nd.

Copyright 2018 by the REALTORS® Association of Edmonton. All Rights Reserved.
Data is deemed reliable but is not guaranteed accurate by the REALTORS® Association of Edmonton.