CMHC and Home Buyer

The housing market in GTA has started moving to become a buyer friendly one. There are so many buyers waiting for this opportunity. I know still the prices are not that affordable and difficult to come up with 20 % down payment to avoid CMHC insurance premium.
Oh...Let me explain you what does it mean by CMHC and how is it helpful to a home buyer.
CMHC stands for? Canadian Mortgage and Housing Corporation.

You might have heard that, you can buy your own dream home with 5 % downpayment and most importantly you are still eligible for banks preferred mortgage rate. Isn't it amazing ? Yes it is amazing our home land Canada always there for its people.

Yes, it is possible through the CMHC insurance. If you don't have 20 % down payment to buy your dream home in Canada, you can purchase insurance from CMHC and then bank lands you money and you can be in your dream home. 
How is works ? ..CMHC takes the buyer under it's huge umbrella. That way CMHC assures the financial institute (bank), that due to unavoidable circumstances if  buyer defaults, financial institute(Bank) is not at risk of loosing money. So the bank can easily land money to those buyers at LOW rate.

Refer table below for rates you need to pay.

Loan-to-Value	Premium on Total Loan		Premium on Increase to Loan Amount for Portability and Refinance
	Standard Premium	Self-Employed without 3rd Party Income Validation	Standard Premium	Self-Employed without 3rd Party Income Validation**
Up to and including 65%	0.50%	0.80%	0.50%	1.50%
Up to and including 75%	0.65%	1.00%	2.25%	2.60%
Up to and including 80%	1.00%	1.64%	2.75%	3.85%
Up to and including 85%	1.75%	2.90%	3.50%	5.50%
Up to and including 90%	2.00%	4.75%	4.25%*	7.00%*
Up to and including 95%	2.75%	N/A	4.25%*	*
90.01% to 95% — Non-Traditional Down Payment***	2.90%	N/A	*	N/A
Extended Amortization Surcharges Add 0.20% for every 5 years of amortization beyond the 25 year mortgage amortization period.†

On the other end those buyers who have 20 % or more toward down payment of the house price, they don't need to buy CMHC Insurance.  

Hope this article would have answered all the questions you had about CMHC Insurance.

Rate has been given in above table. If you have any questions regarding donot hasitate to call me or email me.
Best regards.

Ritesh Joshi

RRSP...How can you use to buy your FIRST HOME IN CANADA ?

One of my client last week asked me questions about RRSP for first time home buyer…What are the benefits……..try to read whole article for all info…

Qualified buyers (as described below) may borrow INTEREST FREE FOR 15 YEARS from RRSP savings up to $25,000 per buyer (up to $50,000 per buying couple) towards the cash down payment on the purchase of a residence.

R.R.S.P. HOME BUYER PLAN ("RRSP PROGRAM") (Important information about the RRSP Program)

FIRST TIME BUYER:You must be a first time home buyer or you (or your spouse or common law spouse) must not have owned a home that you occupied in the last five (5) years. Provided you satisfy all requirements, you may re-activate the program. Before withdrawing RRSP funds, you must have a written agreement to purchase a home.

PRINCIPAL RESIDENCE: You must use the home as your principal residence in Canada within one year of completing the purchase.

RESIDENT OF CANADA: You must be a resident of CANADA for the period between the date of withdrawal of RRSP funds and the closing date of the house purchase.

ANY HOME (NEW OR RESALE): The home can be new from the builder or resale.

NO MONEY OWED FOR PRIOR RRSP BORROWINGS: At the time of the RRSP withdrawal, you must NOT owe any money to your RRSP for a prior borrowing from RRSP to buy a home.

90 DAY DEPOSIT; R.R.S.P. funds must have been on deposit for at least 90 days before they can be used under the program.

WITHDRAW RRSP WITHIN 30 DAYS OF COMPLETING HOME PURCHASE: RRSP funds cannot be withdrawn later than 30 days after the house purchase is completed and if multiple withdrawals, they must be made in the same calendar year or in January of the next year.

FUNDS FOR ANY USE: The funds can be applied to the down payment, land transfer tax, legal fees and disbursements, improvements to the home, even furniture and appliances.

MAXIMUM $25,000.00 PER BUYER: You can borrow up to a maximum of $25,000.00 from your R.R.S.P. tax free. Maximum for two spouses (or any 2 buyers) is $50,000.00. Any such qualified withdrawal from RRSP is not subject to tax at time of withdrawal.

PAY BACK: After an initial grace period of the year in which the withdrawal was made (plus one more full calendar year), you are required to pay back the funds borrowed (beginning in the second year following the year of withdrawal) over a period of 15 years by depositing 1/15th of the amount withdrawn, annually to your R.R.S.P. Prepayments are allowed at any time without penalty. However, if you miss a payment for any given year, you will not be allowed to pay it back and it will be included in your taxable income for that year. If a person paying back dies or becomes a non-resident or becomes 70 years of age, additional repayment rules apply.