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Financing, Mortgages and Insurance What options are best for you and your situation?


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  #1  
Old 2008-08-20, 01:18 AM
West Nile West Nile is offline
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Default Builder deposit and downpayment

Does anyone know if the deposit can be a part of the 20% downpayment to dodge CMHC? Or do we have to have 20% on top of the downpayment for us not to pay CMHC fee?
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Old 2008-08-20, 07:33 AM
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GregS GregS is offline
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Deposit and downpayment, same thing. It will be itemized in your final statement. You will also go over this with your lender.
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Old 2008-08-20, 07:42 AM
Katherine&Chris Katherine&Chris is offline
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Your deposit most definitely counts towards your down payment.

If your house is $100k and you gave 10k to your builder as a deposit you only need to come up with 10k more upon closing to make your 20%
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Old 2008-08-20, 11:33 AM
West Nile West Nile is offline
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Thanks for the reply, i came across a thread and saw a link with a closing calculator which threw me off because it does not add on the deposit to dodge CMHC. I was getting a little bit worried.

http://www.guertinlaw.com/calculator/index.php

Thanks again.
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Old 2008-08-20, 08:49 PM
Kevin Kevin is offline
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Quote:
Originally Posted by West Nile View Post
Thanks for the reply, i came across a thread and saw a link with a closing calculator which threw me off because it does not add on the deposit to dodge CMHC. I was getting a little bit worried.

http://www.guertinlaw.com/calculator/index.php

Thanks again.
Is that tool accurate? I put in values for a 30% downpayment and it says you still have to pay CHMC mortgage insurance.
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Old 2008-08-20, 10:35 PM
Mark & Lynda Mark & Lynda is offline
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Canadamortgage.com has some good calculating tools.

http://www.canadamortgage.com/calcul...TOKEN=16281007
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Old 2008-11-10, 02:58 PM
BryandSteph BryandSteph is offline
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Quote:
Is that tool accurate? I put in values for a 30% downpayment and it says you still have to pay CHMC mortgage insurance.
I too noticed on the CMHC website that they have insurance premiums listed for loans up to and including 65% of the purchase price which is over the 20% downpayment http://http://www.cmhc-schl.gc.ca/en...moloin_005.cfm

On the other hand I have heard that you can get a better rate from the lender if you insure your mortgage...
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Old 2008-11-10, 10:18 PM
prb prb is offline
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Yes, the deposit does count as part of the downpayment.

CMHC offers insurance for mortgages with a lower loan-to-value ratio of than 80% (which is 20% downpayment), however lenders do not typically require it. It typically is required for an unusual or high-risk transaction such as a self-employed person with a few investment properties and using a "Self-declared income" mortgage rather than one where they must prove their income amount, or when multiple properties are mortgaged together (such as increasing the mortgage on one property to use it as downpayment on another). Typically insuring a mortgage worth less than 80% of the property value will not affect the interest rates in most cases.

Last edited by prb; 2008-11-10 at 10:23 PM.
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Old 2008-11-11, 11:43 AM
BryandSteph BryandSteph is offline
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Quote:
however lenders do not typically require it.
What do you meant that lenders to not typically require mortgage insurance? I thought it was mandatory for any house purchase with a downpayment of less than 20%
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Old 2008-11-11, 01:09 PM
Jenny1975 Jenny1975 is offline
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I believe prb was actually referring to the loan/value ratio, not the % down. A loan/value ratio < 80% means a downpayment > 20% (e.g. 75% loan/value ratio and 25% down).

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CMHC offers insurance for mortgages with a lower loan-to-value ratio of than 80% (which is 20% downpayment), however lenders do not typically require it.
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