Can I Borrow My Down Payment?

Yes.  Borrowed down payment is allowed.  It’s called “flex down” program under CHMC.  They can be home equity line of credit (HELOC), gift from immediate family, or lender cash back incentives, lowest rate to highest rate, respectively. Keep in mind the following conditions. 

You must have good credit score (>650 on equifax).  There will be slight insurance premium (2.90% on the loan amount due to 95% LTV high ratio), which can be amortized into your payments.  Lastly, You will need to have sufficient income to qualify for the mortgage (on your line 150), or if you are self-employed, your reported income must be sufficient to debt service, and it must be an owner-occupied property.

The advantage of the strategies is to allow borrowed down payment at the better mortgage rate.  Whereas, cash back mortgages are always offered at higher rate, designed to offset the rebate money the lender gives you on closing day. 

Can I borrow my down payment if I need to “state” my income? (self-employed)

Generally the answer is no. However, there are a couple of other options if you need to both borrow your down payments.  For creative financing solutions, contact us cchien@mortgagegrp.com.