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:
- 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.
- 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.
- 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!