 Sam
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Joined: 21 May 2005
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 Posted: Wed Jul 07, 2004 3:58 am Post subject: What is a 5% Down Payment Programme? |
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5% Down Payment program refers to that financing program which permits a borrower to make down payment of 5%, for getting a mortgage loan.
Features Of 5% Down Payment Program:
- Affordable housing program - It is an affordable housing program for low and moderate income buyers.
- Minimum Down Payment - Here, a borrower is required to make minimum down payment of 5% for securing a mortgage loan.
- Requires Default Insurance - The loan secured by 5% down payment, must be insured against default by CMHC mortgage housing corporationor GE capital mortgage insurance corporation.
- Excellent Financing Vehicle - It allows borrowers to obtain a mortgage loan up to 95% on the property of a certain value.
- Flexible underwriting guidelines - It has flexible underwriting guidelines. It is ideal for homebuyers who lack funds for down payment and have high credit ratings.
- Relatively High Interest Rates - It has relatively high interest rates than other usual mortgages payment schemes.
- Includes Insurance Premium - Here, a borrower is charged to pay mortgage insurance premiums. The insurance premiums are added to the mortgage without affecting the loan-to-value ratio.
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