Today I’m going to talk about a couple myth’s and truth’s about mortgages that people commonly misunderstand.

• If you’re buying your second home (or third, or forth, of seventeenth) you can still put 5% down. There is NO rule about having to put 20% down on your next home. The only rule regarding first time home buyers is that they are the only ones eligible to use their RRSP’s as a down payment without penalty.  You can even have two homes at the same time that you’ve put 5% down on. Say for example three years ago you bought a house with 5% down the you live in, and now you want to buy a cabin with 5% down. YOU CAN!
• If you put 20% down you get a better rate. Sadly this is not usually true. Especially with the new rules some lenders have made it more costly for buyers that have 20% down. Not all lenders though! It will really depend on your situation as a whole, but be prepared to see slightly higher rates if you have a higher down payment. (I know, it makes little sense, but its the reality of the new mortgage market).
• If your mortgage is up for renewal, you don’t have to requalify. Provided your lender has offered you a good rate and you want to stay with them, you can just sign on the dotted line and stay right where you are! This can make things a lot less stressful if the last couple years in oil town were hard on your finances. Be sure to have your broker review your renewal offer to make sure staying is what you should be doing!
• Alternatively, if another lender has a better offer for you (and you qualify to move) you can and its usually free! Again, make sure you talk to your broker to review all your options!
• If you’re buying a rental, be prepared to put 20% down and pay higher rates. Gone are the days of insured rentals and competitive rental rates.
• If you’re refinancing be prepared to pay higher rates as well. Unfortunately the government has made it harder and more expensive to access your own equity.
• You can still buy a home with a borrowed down payment. This one is a little more tricky, but if you have good credit and the ability to debt service the payback of your borrowed down payment you can use a line of credit or other credit avenues for your down payment. I don’t always advise it, but it can work in the right situations!

Overall with all the new rules and changes the mortgage world is even more complicated then before. We’re always here to help you navigate these complicated rules.