The maximum mortgage loan of 95% of the lending value of the house is available until February 1999. The qualifying interest rate is the higher of 5 year rate or actual interest rate. The minimum mortgage term is 3 years. Maximum amortization period is now 25 years. This is effective March 31, 1997.
Anyone who buys a home in Canada as a principal residence.
Anyone who has not owned a principal residence at any time during the past 5 years.
Where their is more than one co-buyer, only one has to be a first time buyer as defined above.
Anyone who has had to sell their principal residence as a result of a formal marital break-up. (Including common-law relationships)
Anyone who has had to sell their principal residence for employment reasons and moved to a new geographic location.
Anyone who has sold their principal residence and experienced a loss of equity.
Provided that the net proceeds, if any, from the sale of their previous principal residence are applied toward the purchase of the property which is the subject of their application.
The buyers' Gross Debt Service Ratio (GDS) may consume up to 32% of their gross family income for payments of principal, interest, property taxes (P.I.T.) and heating. The buyers' total debt load cannot exceed 40% of gross family income.
Financial Gifts:
The minimum equity requirement (5% for FHLI and 10% for Regular Homeowner Mortgage Insurance) may be partially or wholly met by way of a non-repayable contribution from an immediate relative, as long as the Approved Lender can verify that: (a) the money is a genuine gift, and (b) the funds are in the borrower's possession at least 30 days before the date of the offer to purchase.
The approved lender must verify that the borrower can cover closing costs, in an amount of at least 1.5% of the purchase price, either in cash, or by including the amount in the calculation of total debt service (TDS) ratio, based on 12 month repayment.
On loans over 90% of the lending value of the house, the premium will be 2.5% of the mortgage loan plus 8% PST. The premium, but not the 8% PST, may be added to the mortgage. The premium is now portable.
In greater Toronto area, (Orangeville, Calledon, Brampton, Mississauga, Oakville, Milton and Halton Hills) the maximum house price is $250,000. In Erin the maximum house price is $175,000.
If you don't qualify under this plan, the maximum mortgage loan is 90% of the first $180,000 of the lending value of the house plus 80% of the balance. The minimum down payment is 10% + .
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