Busted! Don’t Believe These Down Payment Myths!
If you’re thinking of buying a home, you’ve probably considered the enormity of the responsibility that goes along with it. And while it is a courageous task, it doesn’t make it any easier to deal with the process leading up to it. One of the first major tasks is shelling out that down payment, and saving up is hard. Many people believe that they have insufficient funds to make the down payment which deters them from moving ahead with their decision.
You may have even received some well-meaning, but ill-informed advice, leaving you in more of a blind panic than you need to be. So to help you steer clear of misconceptions and false facts, Steve Hayward has debunked some of the most widely believed myths about down payments.
Myth 1: Five percent down payments are no longer accepted.
When the government released its new mortgage lending criteria, they changed policy in qualifying for mortgage financing. This new policy was conveyed to the public by media that did not fully understand the new policy. So now I find many myths surrounding these new rules. One of the myths is that five percent down payments are no longer accepted. This is just not true.
Myth 2: A down payment must come from your own funds.
Another myth when it comes to down payments is that many are in the understanding that the down payment must come from your own funds. In many cases, your down payment can come from an immediate family member. This would be in the form of a gift. All you typically need is proof of where the money is and a gift letter from the family member. This can be the whole down payment or just a portion.
Myth 3: Lenders do not support flex-down programs.
A common mistake I find is that buyers don't consult with a mortgage broker to review their down payment nor see what their down payment options are. In some cases, if you are short or have no money to put down, there is an option to borrow the needed funds. This flex-down program is supported by many of our lenders.
If you’re looking to steer clear of myths like these and others, reach out to Steve Hayward. As the best mortgage broker in Hamilton, ON, I work for you in your best interest and not for the lenders, credit unions or banks. Over the past five years, I have offered my clients first and second mortgages, debt consolidation, mortgage renewal, and many other mortgage-related services. For a complete list of my services, please click here. If you have any questions about how I can help you, I would be happy to answer them. Please click here to get in touch with me.