Monthly Archives: June 2011

In the not-too-distant past, no-down payment loans were all the rage for home buyers, but now it seems that banks and other lenders have once again raised the bar. Now, down payment is required by most financial institutions on the property market in Canada. Down payments come with some great advantages, and the major one is that the borrower pays a considerable sum upfront. Another very important advantage involves being able to actually qualify for a loan, because very few lenders are offering no-down payment loans at the present. The larger amount you are able to pay in the form of down payment, the less you will pay in monthly installments. Your down payment is directly transformed to equity in the home when you close the purchase. If you have to get a HELOC or home equity loan or a line of credit, you can borrow against the equity. However, the standards for qualifying for these loans have become much higher, as mentioned. Many first time homeowners make a common mistake as they direct all money they have earned to the down payment. It is a better idea to save some money because keeping a home can be expensive. This is why a lot of lenders have developed their loan programs to include the requirement for cash reserves. Continue reading →