It can be challenging to save up enough money for a down payment of 5 per cent or more, especially for first-timers. A flex down mortgage lets you pull from a credit source for your down payment in order to let you purchase your home quicker. Lenders will factor in the monthly payment on the down payment source. Since you are borrowing money for a down payment, lenders will calculate this into their assessment of the mortgage application. If lenders feel that the amount of debt is too high relative to income, they may not approve the loan application. Calculators Apply Now Flex down is a riskier product for lenders so it is only available to income-qualified, employed people with no blemishes on their credit.
What is a flex mortgage loan?
Saving that much money can be daunting. What some lenders are doing, is offering a product called a Flex Down Mortgage payment, where all or some of the money can be borrowed from other sources such as a line of credit but not a HELOC. The amount of a down payment in a Flex Down Mortgage is flexible based on the property value. In order to qualify, a Flex Down Mortgage product must be on a first mortgage, not a second, third, or in a refinance. Lenders will factor in the alternate down payment source when they look at your loan application. They will calculate the down payment into the monthly obligations.
PH: 1 TF: 1 There is a mortgage option that does not require any minimum down payment at all, and it has a competitive interest rate as well. Most people start thinking about buying a home after they have been out of college for a few years and have settled into their profession. Keep in mind that Zero down mortgage do not exist. With flex down mortgages , you borrow the money for your down payment from a third party — someone other than you and the bank extending you the mortgage. This could be a relative of yours, a friend of yours, a private third party, funds from a credit card advance, or a personal loan. Your eligibility for this sort of situation depends on your credit, because you are taking out not one but two loans to cover the purchase of the property, and you have to make both payments each month to ensure that you stay in the home.
Oh the lengths people will go to squeeze themselves into a new property. Yep, believe it or not, some lenders are more than happy to let you borrow your down payment off a credit card. And government-backed default insurers support it.