Today, it is still possible to purchase a home with a 5% down payment.
Investing in Edmonton's real estate market is relatively simple. For a small amount of money down, usually five percent, (plus closing costs) and can own an asset worth significantly more and build your net worth. Your down payment must be from your own savings or a gift from a family member. You cannot use a loan or line of credit.
To use the 5% down payment option, the following rules apply:
The home must be your principal residence - in other words, you will actually live in the home. So if you plan on buying a condominium or other property for residual income, you won’t be eligible for the Canada Mortgage and Housing Corporation’s 5% down payment option.
To calculate your GDS or Gross Debt Service ratio, factor in your monthly mortgage payment, utilitie costs, property taxes and condo fees, if applicable. This number cannot exceed more than 32% of your gross taxable income. Plus, all your consumer debt, loans and housing-related payments cannot exceed 40% of your gross taxable income—this is your Total Debt Service ratio or the TDS.
Finally, you must have good credit and a minimum of one year with your current employer.