- 5% Down Payment is still available at the lowest interest rates, assuming provable income and good credit.
- 1.85% variable rate and 3.69% 5 year fixed rate.
Stated Income has become more difficult:
Stated income allows
business for self and
commission borrowers to
"state" the amount of their income rather than
"prove it" by means of their 2 year average income as shown on their income tax Notice of Assessment. This option is available to business for self borrowers and commission sales people (including Realtors) who could prove they had been in business or on commission for 2 years or more. A 5% down payment was acceptable and the CMHC insurance cost was roughly double that offered to provable income borrowers. A 25% down payment (rather than the normal 20%) was required to avoid CMHC insurance.
What's Changing for stated income borrowers on April 9th.
- minimum down payment increases from 5% to 10%
- self employed borrowers who have been in business for 3 years or more will now have to prove their income meaning stated income will not be acceptable.
- commission sales people are no longer eligible for the stated income option. This will be a problem for commissioned real estate professionals who will now have to prove their income by means of their tax returns.
If you want to know more about Toronto real estate, call sales representative and mortgage agent Alexandre (Alex) Malkhassiants, Right at Home Realty, with all your questions: (416) 723-9383 (cell).