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Old 09-23-2009, 03:57 PM
NoDebtGuy NoDebtGuy is offline
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Join Date: Sep 2009
Posts: 1

Originally Posted by welshboy View Post
CMHC and Genworth have taken the 100% financing away which allowed borrowers to purchase a home with no down payment with FIs best available rates. Borrowers had to have a beacon score of at least 680 and if joint applicants then both had to have over 680. There was also another option for no down payment mortgages called the cash back which is a 5% cash rebate from the lender which can be used for the down payment. The FI will charge the borrower the posted rate for the mortgage and the borrowers have to have a beacon score of 650 and joint applicants can average scores to be over 1300.

if the borrower breaks the mortgage they have to pay a penalty and also the lender will claw back some of the cash back as well. So the cost of breaking the mortgage can be really expensive.

So really no down payment mortgages have not gone away they have just become more expensive.
In reality the only difference between the cash back programs and the zero down programs is the claw back if you have to break the mortgage. They may have become marginally more expensive depending on what you can negotiate for a rate.
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