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Non-Traditional Down Payment Mortgage

The Non-Traditional Down Payment Mortgage has been developed for homebuyers who have excellent credit history (Score of 650 or greater) but have not accumulated the required down payment. This product is available for mortgage loans between 90.01% and 95% LTV inclusive.

The client can obtain the down payment sources other than saving it up. The Permitted sources are:

  • Lender cash back incentives or loans

  • Equity borrowed which can include personal loans, lines of credit or credit cards

  • Gifts or grants from any party that is arm’s length to the property purchase or sale transaction

  • 100% sweat equity from either the borrower or contributed by another party that is arm’s length to the property purchase or sale transaction

Sources that are not permitted include:

  • Builder incentives or loans;

  • Realtor or mortgage broker incentives or loans to the borrower that impact the property-selling price

  • Loans or gifts from the property vendor

    Rent to own payments that are not in excess of the current market rents

  • Third parties that receive payment from the vendor or builder

Non-Traditional Down Payment Mortgage Example:

Purchase Price:

$300,000.00

Down Payment (5% from the permitted sources):

$15,000.00

Mortgage (95%):

$285,000.00

Insurance Premium (2.9%):

$8,265.00

Total Mortgage:

$293,265.00

Mortgage Rate (4.35%):

 

Monthly Payment:

$1,598.78

 Current rates may differ from the example

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