Mortgage Options

Low Income Mortgage Loans

By January 20, 2015November 11th, 2020No Comments

How To Get A Low Income Mortgage Loan?

If you feel like you’ll never be able to get into the home you want because of your income, a low income mortgage loan maybe the answer. According to the Canada Mortgage and Housing Corporation, 20 percent of families and individuals in Canada cannot meet their housing needs on the basis of the marketplace. This is why there are so many collaborative programs involving government agencies, nonprofit entities, industrial partners and regional government organizations. They provide access to housing opportunities at a more affordable level, with just the CMHC investing $2 billion each year to improve housing access for people with low income levels wondering how to get a low income mortgage loan.

Some of this money goes to supporting more than a half million families and individuals who are living in public housing, both on and off reserves. It also includes about $240 million that goes to affordable housing opportunities, both existing and new, through the Investment in Affordable Housing (IAH) program. This program works with territorial and provincial governments to give residents access to affordable housing that is tailored to the needs of the community. Territories and provinces match the investment from CMHC.

Low Income Housing Assistance

There are many programs and grants available that can provide you access to affordable housing. In Alberta, this is available in four different programs: the Regular Rent Supplement Program, the Direct to tenant Rent Supplement, the Residential Access Modification Program and Special needs Assistance for Seniors. None of these involve assistance for home purchases, although if you are a tenant trying to sock away money for a down payment, having that additional money coming in can help you compile a bigger down payment. Each province has similar programs that you can access. You need to get in touch with your municipality for direct assistance.

In Canada, there are a variety of programs that help low income Canadians. Manitoba and Saskatchewan provide forgivable loans designed to be used for repairs. This is a real boost for people who are struggling to make mortgage payments but have no way to make major repairs to maintain or enhance the value of their home. This not only improves their quality of life, but it also helps build value in the home should they want to sell and move somewhere else. Some of these programs provide financial aid to homeowners who need to make emergency repairs to their homes. This is designed to help people who cannot afford the necessary fixes to keep their homes liveable after natural events or fires. This sort of event can be a real catastrophe for a family — not just for their immediate circumstances but also for their property value, and this program is a real lifesaver for many people throughout the year.  BC offers the Federal-Provincial Housing Initiative, designed to help low income people who are at risk of homelessness. This is a bridge from extreme poverty to housing with public assistance, which for many people is the first step toward eventual home ownership. 

Low Income Mortgage Loan

If you do not qualify for any of the programs or grants available in your province you may qualify for low income mortgage with a private lender. In order to potentially qualify, you need adequate down payment if purchasing and adequate equity if refinancing. What is adequate down payment or equity? Depending on property location, type and other application details, you would need at least 25% equity plus applicable fees and closing costs. For example, if you are purchasing a property for $400,000; expect to be able to provide $100,000 plus if purchasing. From a private lender’s perspective having low income is not a deal breaker, but there needs to be a solid plan to increase the income so that you can transition to a traditional bank lender in the near future. If the the low income is likely not to change, a Low Income Mortgage Loan is likely not for you unless you have a cosigner or guarantor for your loan.

We have helped many overcome homeownership and refinancing obstacles, and we look forward to finding a solution for you! Give us a call if your in need of a low income mortgage loan or  bad credit mortgage today.

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