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First Time Home Buyer Down Payment

If you are someone who has always dreamed of owning your own home, but can't seem to save up enough for the minimum 5% down payment, then this is something you will want to continue reading.

It is not commonly known but many regions in Ontario have a program to help first time home buyers enter home ownership by loaning them the initial down payment. You may have been told by the bank or a mortgage broker that you cannot borrow your down payment and that is true - other than with the exception of this government program. The program is typically called "Affordable Home Ownership Down Payment Loan Fund" and it is really something to consider if you want to own a home but do not have enough saved for your down payment. How to apply? Most regions have information on their website that give you full details on the program. Since the program is really attractive there may be a waiting list for applicants. You can CLICK HERE for information on Waterloo regions program and CLICK HERE for Wellington County (Guelph). In a nutshell, the government will lend approved applicants their down payment interest free and will give you 20 years to pay it back. If you are worried about the repayment, don't be, because typically within 5 years of home ownership, you will have enough equity in your home to make this payment back to the government through a mortgage refinance. Of course, you can make payment through other means as well, like through your own savings. Are there any other options for First Time Home Buyers Down Payment? If you aren't aware you can also be gifted down payment from your parents. If your parents are willing to help you out and gift you the minimum 5% down payment I highly recommend taking them up on their offer. It will allow you to enter the world of home ownership much quicker and without needing to repay. Since Ontario homes continue to rise, this down payment method is becoming more common. It is hard to save 5% down when many entry level homes are over $400,000. There is another available option as well. You could use a B lender/ subprime lender that has more flexibility in regards to where the down payment comes from. Some of these lenders will allow you to borrow your down payment from a line of credit, or through a personal loan. However, they will require more than 5% down; typically they will want a minimum of 20% down. They will also charge higher interest rates and will most likely add fees. For these reasons the above options are generally more attractive to first time home buyers. If you are a first time home buyer and have any mortgage related questions please reach out to me. I can provide you with more details on the government programs that are available and answer any other questions you may have. Helping First Time Home Buyers, whether they are ready to buy right away or not, is one of my favourite elements of my job as a mortgage agent! Thanks for taking the time to read!

Tess Arpa Mortgage Agent Excel Mortgage Canada Connection, Cambridge Ontario 519-820-2734


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