Is it illegal to have a seller reduce their price from $100,000 to 90,000 and show the remaining 10,000 as a downpayment even though you and the seller have agreed on a final price of 90,000? If so can you tell me some positive ways in which to attract a seller to a deferred downpayment? And how do you make it legal?
A:
Entering into a contract with the purpose of fooling the bank could be illegal. A deferred down payment may be ok with the vendor but not so ok with the bank or CMHC/GE. Maybe it would be ok if the home owner deferred transfer of the title to match the deferred down payment.
Q:
I'm interested in purchasing land on the island for approximately 100K. My down payment would be 25%. Would banks lend the 75% balance for LAND? Would the mortgage rates be any different? I currently have a home secured line of credit on my principal residence. Can I get the same product on purchase of LAND as well?
A:
Purchasing Land
If you are planning on buying land without any buildings on it the banks will want more collateral than 25%. You may have to come up with 40% to 60% down payment. If you have sufficient equity a bank will give you a secured line of credit against almost anything including land. The rate will most likely be higher than a conventional mortgage for a house, condo, or townhome.
Q:
My brother and I bought a house 5 years ago and we just renewed our mortgage back in April. Right now, I'm thinking of buying a condo for rental as an investment for myself and I afraid I won't get another loan because my brother had just bought another place for himself. I don't have much down payment to begin with. Is there anything where I don't need to put a downpayment? What about the equity on the house we both bought? Thank you for your time and advice.
A:
Thank you for your question. Your ability to buy a condo will depend on your income, debts, and credit status. Yes you can use the equity in your current property to purchase the condo. There are mortgages, too many to discuss here, that effectively don't require a down payment. Please give me a call at your convenience to discuss zero down possibility.
Q:
I am in the process of purchasing a home. I have received several pre-approvals for a mortgage, which are over 120 days. I have been told that I am promised the lowest rate. I have been out of touch with the rates for 3 to 4 weeks. I would like to know if there is any place that I can bring up the historical mortgage rates? I would like to get a better idea before going back into the bank.
A:
Thank you for your question. No there is no central historical interest rate center for mortgage rates. Interest rates go up and down all day long with the bond yields. If there was a place, what rate would be posted. . . the opening, closing, highest, or lowest rate each day or hour according to which bank? Banks set their own mortgage rate independently from other banks.
Q:
When someone does 100% financing do they still need CMHC/GE capital insurance? Are there any circumstances where you don't need the insurance except for a 75% mortgage?
A:
Thanks for your question. There are many mortgage lenders that self insure their mortgages. Most of the Banks that offer 100% financing are insured by GE Capital. A lender that offers 100% financing and is self insured is Xceed mortgage
