Mortgage Loan Insurance is required when a mortgage loan is more than 75% of the appraised value of a dwelling. Homebuyers with CMHC Mortgage Loan Insurance can purchase a property with as little as 5% down. It protects NHA Approved Lenders against loss due to borrower default on the loan.

NHA Mortgage Loan Insurance is available through NHA Approved Lenders (banks, credit unions, trust companies, and other financial institutions). With CMHC Mortgage Loan Insurance, thousands of Canadians are able to realize a dream of home ownership that would not otherwise be possible.

Criteria for NHA-insured Loans
Approved Lenders may provide NHA-insured mortgage loans for all types of new and existing housing units (including manufactured homes) and for a variety of purposes such as home ownership and rental. The essential requirements are that:

the housing be intended for full-time rather than seasonal occupancy

the housing does or can reasonably conform to established construction standards; and

not more than a reasonable portion of the borrower's (or project's) income is required for mortgage repayment purposes, and other housing related expenses.

Deposit is money offered at the time of acceptance of your offer and is held in trust by the listing real estate Broker. This money is forwarded to the lawyers on closing and is part of your down payment.

The down payment is the amount of cash in total that you are putting towards the home. The balance of your down payment is not required until closing day.

Buyers can use as little as 5% down payment if they qualify for the balance of the mortgage.

1. Price of property purchased is $250,000 (Toronto area) or less.
2. Home must be principal residence - does not apply to investment property.
3. Buyers must not have owned a home as a principal residence in the last 5 yrs.
   
   Exceptions:
   a) Only one buyer has to qualify for 2. and 3.
   b) Hardship due to homeowner having had to sell their principal residence:
   1. Due to formal marital break-up (includes common-law).
   2. For employment reasons and moved to a new geographic area.
   3. Sustained a loss of equity. Provided that the net proceeds from the sale are applied to the purchase of subsequent principal residence as part or all of the down payment.
      
      
4. Payments for principal, interest, property tax, heating and 50% of any condominium fees can't exceed 32% of your gross family income. (GDS ratio)
   
5. Your total debt load, including car payments etc. can't exceed 40% of your gross family income. (TDS ratio)
   
6. CMHC Mortgage insurance must be purchased at a cost of 2.5% of the mortgage balance. This cost may be added to the mortgage and paid off monthly as part of the mortgage. This insurance is for the sole benefit of the lender but is required by law.
   
7. Down payment must be from your own resources or a gift. Financial gift from family must be in the buyerÕs possession at least 30 days before making an offer.
   
8. Mortgage term must be at least 3 years but must be qualified at five years or longer.
   
9. At least one year on your current job.
   
10. Clean credit rating.
    
11. Buyers are required to demonstrate at the time of application their ability to cover closing costs of at least 1.5% of the purchase price in addition to the 5% down payment.
12. Maximum amortization period is 25 years. Other conditions may apply.
    

Please call Peter Mulholland and Ora Ross at 416-222-8600 or e-mail info@realestatenorthyork.com .
This information is believed to be accurate but is not guaranteed to be so.

1. Married couples are considered first time buyers if neither has owned a principal residence in the last five years.
   Notes: * Buyers may own or have owned investment property.
   * In certain cases only one spouse may qualify.
2. Cannot have participated in the Plan previously. You can only use the plan once.
3. Must be a resident of Canada. You do not have to be a Canadian Citizen.
4. The home must be located in Canada and be the principal place of residence.
   You must repay your RRSP withdrawal over a period of 15 years with minimum payment of 1/15 of the total amount withdrawn.

This information is believed to be accurate but is not guaranteed to be so.