Purchasing a Home With Rental Income

Whether you are buying a home to owner-occupy with a rental suite (a great mortgage helper!) or a rental property on its own, take advantage of one of the very few lenders offering deep discounted low interest rates and providing up to 80% loan to value on a 40 year amortization (yes, a 40 year amortization is still available!).

More importantly, the lender will use an 80% rental offset on the subject property. What that means is if the rental income is $1,200 per month, then the lender will deduct 80% of this rental income (or $960) off of the mortgage payment for qualifying purposes. We have helped many clients that now enjoy home ownership today by using the above scenario.

You Can Still Buy With Zero Down!

With the recent announcement that the Federal Dept. of Finance has eliminated 100% financing, a few lenders are still offering a 5% cashback incentive (which provides for the 5% downpayment) provided that you accept their posted 5 year closed term (or longer). So, if you purchase a residential property for $200,000, the lender will provide the necessary 5% downpayment in order to qualify for CMHC/Genworth insurance.

Using today's 5 year posted rate of 7.20% and a 35 year amortization, the monthly payment is $1,265.05 per month (o.a.c.) for a mortgage amount of $195,985 (the CMHC/Genworth premium is $5,985 and is added to the mortgage.

For those of you renting and perhaps considering home ownership in the near future, but are finding it difficult to save for the downpayment, this could be a great alternative. Once your 5 year term is over, you can then qualify for the bank's best discounted rates for the balance of the amortization.