I will now be posting occasional Real Life Stories about my mortgage situations I encounter. I will be posting these along with my regular blog posts. These will be short and sweet and contain a quick story that may be helpful as you plan your next purchase or refinance! 🙂
Here we go!
I had a meeting with a new client this week and they said “I almost have 20% down so I can buy my next home. I would like to get pre-approved now that Im almost ready”.
I asked “Nice work. Are you buying a rental?”
“Nope. But I plan on keeping my current home as a rental and will be buying a new home to live in.”
I was then able to give the best news of the week that as long as you move into the home you are buying as your owner occupied home, 5% down is all you need. Even if you own 5 properties already! If you are moving into the next purchase as your personal home, 5% down is all you need. It doesn’t even need to all come from savings!!! Could be from family or partially from your line of credit.
There seems to be a myth that still exists that if you own a home already you automatically need 20%. Not true. 5% down is the minimum when you live there.
It is smart to put 20% down because you avoid CMHC and have a smaller mortgage, but it is not necessary. You don’t want to miss out on the deal of the year because of misinformation!!