How to Buy Real Estate Property with No Money Down

Real Estate Faizal Garasia 22 Oct

When you work, you realize all your money goes to your bills and loans. You pay for water, electricity, and rent, among others. However, none of these things you’re paying for actually goes to you. As time passes by, you want to see where your money goes. You want to see that all your efforts are worth it.

You decided to look for potential investments in real estate. It’s a lucrative investment, especially now that real estate in Canada is booming. Besides, it would be an achievement to purchase a home you could finally call your own.

The only problem is the huge amount of money you have to provide before making your first home purchase. This is one of the most dreaded parts of buying your home in Canada. Since the real estate business is flourishing, prices of houses, including down payment and other associated fees, are also rising.

But don’t worry! You can still invest in real estate with no money down.

Does no money down real estate investment exists in Canada?

Yes, you read it right! No money down investments exist. It’s a good option, especially if you don’t have enough funds for your down payment. And yes, it also seems too good to be true. So, you have to know what a no down payment mortgage entails before signing up for one.

How does this work?

Like any other mortgage, zero down real estate investment financing also has its qualifications. First, you still have to have a stable source of income. Your income should be able to pay for your current bills and your additional mortgage dues. You also need to have an excellent credit score. Having an above-average credit score is an indicator that you are good at handling your finances. Lastly, you also need to be able to have a back-up plan should you experience financial problems, such as loss of employment or a decrease in salary.

If you have all the conditions listed above, then you can start processing for your first no money down real estate investment. The only thing is that there’s no such thing as no money down.

Where should I get funds for my down payment?

Qualifying for a no down payment mortgage does not mean you are exempted from paying your down payment. You’re still going to pay for it, but not through your hard cash. Don’t be confused! Purchasing your home with no money down means there’s no need for you to save money and wait for months until you complete your down payment. You can pay for it by borrowing money through the following options:

  1. Government programs – You can check with the Canada Mortgage and Housing Corporation for government programs that may be available in your province. Some programs offer discounts on the down payment. You might also qualify for incentives if you’re a first time home buyer.
  2. Line of Credit – You can get a line of credit loan to pay for your down payment. However, you should not get it from the same lending institution that helps you finance your mortgage.
  3. Borrow from a family member or close relative – If you have savings but still not enough to pay for your down payment, you can borrow from your family or any close relative or friends. Just make sure to repay them!

There are also other options like using your credit card or getting a personal loan. Whatever your choice is for your down payment financing, keep in mind that it still needs to be paid.

I’m still not sure if zero down real estate investment financing is for me.

We understand if you still can’t decide whether or not to go for a no down real estate purchase. If you still want to know more and learn about investing in real estate, you’ve come to the perfect place. Faizal Garasia can help you with all the things you want to know about real estate. He can even help you find a great rate, terms, and payment options for your mortgage. Give him a call now, so you can start with your first real estate investment!


How to Use RRSP to Buy Investment Property in Canada

Real Estate Faizal Garasia 22 Oct

A few decades ago, most Canadians would work, earn money, and spend their salaries on bills and other expenses. There’s no particular value given to preparing for retirement. That is why, in 1957, the government enacted the Registered Retirement Savings Plan (RRSP) as part of the Canadian Income Tax Act. This is to encourage every working Canadian, whether employed or self-employed, to have savings to their name once they decide to retire.

How does RRSP work?

Since RRSPs are managed and monitored by the Canadian Revenue Agency, there are certain rules and guidelines governing it.

For its contribution, anyone who is employed and a certified taxpayer of the country can open an RRSP account. If you decide to open an account, you may deduct your RRSP contributions from your income. When this happens, you immediately reduce your tax payments. Your pre-tax income goes into your RRSP contributions. It will remain tax-free as long as you don’t withdraw your funds. Once you withdraw your savings from your RRSP, you will then have to pay for your tax at a marginal rate. This will still save you some bucks since marginal tax rates are lower in your retirement years

So, how does your savings in RRSP grow? Your contributions will be invested in bonds, mutual funds, equities, income trusts, and foreign currency, among others.

Can I use my funds in RRSP to purchase real estate investment properties?

Yes, you can use your RRSP funds to invest in real estate. However, you can only do it indirectly

How can I invest in real estate using my RRSP funds?

Here are three common ways you can invest in real estate properties in Canada:

Real Estate Investment Trust (REIT)

REITs are corporations that manage real estate properties or mortgages on real estate properties. It works like mutual funds or stocks, wherein various real estate properties are pooled together to create a diverse REIT portfolio. Since it works like stocks, you have the opportunity to choose whether you invest in retail, healthcare, residential properties, or mortgage REITs. You can diversify your REIT portfolio. You can also sell your shares for liquidity.

Mortgage Investment Corporations (MIC)

MICs are known as mortgage lending companies that cater to homebuyers who have been rejected by banks and other traditional lending institutions. You can invest in MICs so they can lend their money as a mortgage to potential homebuyers. Since most MICs provide short-term loans, you are guaranteed to have at least 2% returns on your investment in 6-12 months.

Lend your RRSP funds to a real estate investor

If you have more than enough funds in your RRSP, you can lend it out to real estate investors. This is more flexible because you can choose who can borrow your money on your agreed payment terms and interest rates. All you need to do is to make your agreement in writing and attested by your lawyer. Should the borrower default on the agreed payment, this document could help support your claim.

Can my RRSP serve as funding for home equity loan?

Although it is quite a complicated process, you can loan from your RRSP to fund your mortgage

If you have an RRSP fund that is equal to the amount of your mortgage, you can use your savings to pay your mortgage lender. In turn, you will have to make monthly payments for your mortgage to your RRSP.

On the other hand, if you already paid off your mortgage, you may apply for a home equity loan. You can use it for other investments that could potentially provide high returns. You can then withdraw your RRSP funds to pay your home equity loan fully.

When you think about it, you’re actually just making payments to yourself!

What should be my next move?

Like any other smart real estate investor, it is best if you consult a mortgage specialist before you take any action on your RRSP. You can contact Faizal Garasia, one of the most trusted . He will help you fully understand the ins and outs of using RRSP to fund your property investment. If you have any questions about mortgages or investing in real estate, he has answers to all of it! Schedule your appointment with him today!


Refinance Your Mortgage: How to get back on your feet after a financial blow

General Faizal Garasia 12 Feb

It is stressful getting into big debts especially when we are caught off guard. To realize that we are not alone in this dilemma is our consolation. We do not own the exclusivity of making bad decisions after all. However, we shouldn’t allow ourselves to get stuck in an unpleasant situation forever. We need to improve ourselves to get us back in the game.

One of the options that you can learn about is refinancing your loans.

What is Refinancing?
Refinancing refers to re-structuring your loan to make repayment terms more easy for you. Speak with your bank and ask for products that would suit your financial needs. Ask your bank’s relationship manager to give you some helpful options on your loan.

Tip 1: Search for a bad credit mortgage lender
Not being able to get a mortgage because of low credit rating is a myth. Still, there are financial institutions which specialize in granting mortgages to applicants. To know the credit score that you need, talk to Faizal, one of the best mortgage agents in Toronto. He will help you know how much you can afford to borrow.

Tip 2: Understand 15-year vs. 30-year mortgage loan
In refinancing a mortgage loan, there is no singular “better” option. The 15-year and 30-year mortgages both have their own perks and downsides. You will pay less interest when you refinance your loan by 15 years. However, you will pay a bigger chunk of money periodically. The amortization is less for a 30-year mortgage but the length of repayment could set you back longer. Check if you are allowed to pay extra in a 30 – years mortgage without early loan termination cost.

Tip 3: Know what to avoid when getting mortgage loans
Avoid other loans when you know that you are still trying to get back your financial strength. There are a few things that you must regard to hit-proof your credit score. Seek for a financial advisor if you are clueless on what exactly to do or where to start. To help you sort out your exclusive maze to financial liberty, you may ask help from Leads Genic.

Leads Genic is for mortgage applicants who need assistance in learning about current financial options. Moreover, Leads Genic is especially for you if you want to have an informed decision, this time around.

Are you ready to find out more? Call Leads Genic now and get the best mortgage refinance rates.