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Updated over 5 years ago, 05/11/2019
Down payment on rental
Hey BP! My parents own a 6 unit apartment. If I buy it off them then live in one unit and rent out the other 5. Will I still qualify for a lower intrest rate and mortgage rate because I live In the building. I know this works with muti family homes. But does it work this a 6 unit apartment. Looking forward to the responses!
@Steven Coppola this is in Windsor Ontario, Canada keep in mind. I forgot to out that
#3 Managing Your Property Contributor
@Steven Coppola Check with your bank. For rentals where you live in the house and rent out the basement, for example, you can do a lower down payment. If your down payment is less than 20%, you have to pay CMHC insurance which is rolled into the payments, but isn't cheap. For a 6 unit apartment, there might be a different type of mortgage. My parents had one years ago in BC and rented all 6 units. They had a normal residential mortgage.
The best way to find out is calling bank and mortgage agent for an answer
@Theresa Harris what’s CMHC stand for sorry I’m new and trying to learn the lingo
It sounds like you need commercial mortgage. Check your local bank(s).
@Steven Coppola, 6 units + does require a commercial mortgage. I have a great mortgage broker here in Windsor that could walk you through this. P.m. me if you'd like more details.
im curious how different canada lending is to american
@Steven Coppola You can buy 6-units in the residential channel with 20% down. But you can't take advantage of a 10% down payment which is possible up to 4-units & a 5% up to 2-units.
Originally posted by @Scott Innocente:
@Steven Coppola, 6 units + does require a commercial mortgage. I have a great mortgage broker here in Windsor that could walk you through this. P.m. me if you'd like more details.
Not always. Check with CIBC and RBC ... both have underwritten 5/6-unit buildings as residential.
Steven:
Didn't you ask this same question in another thread? {Please post a thread/discussion only once in the most applicable forum ... multiple postings of the same question/topic, fragments the discussion and makes the information more difficult to access when searching the forum archives}.
Even if you are able to finance the 6-unit building as residential, you will be required to place a conventional mortgage with a minimum downpayment of 20%. The guidelines for insured, high-ratio, mortgages only cover 1-4units {to an LTV of 95% for SFH or duplex and 90% for a triplex or quadruplex}.
Originally posted by @Roy N.:
Originally posted by @Scott Innocente:
@Steven Coppola, 6 units + does require a commercial mortgage. I have a great mortgage broker here in Windsor that could walk you through this. P.m. me if you'd like more details.
Not always. Check with CIBC and RBC ... both have underwritten 5/6-unit buildings as residential.
Steven:
Didn't you ask this same question in another thread? {Please post a thread/discussion only once in the most applicable forum ... multiple postings of the same question/topic, fragments the discussion and makes the information more difficult to access when searching the forum archives}.
Even if you are able to finance the 6-unit building as residential, you will be required to place a conventional mortgage with a minimum downpayment of 20%. The guidelines for insured, high-ratio, mortgages only cover 1-4units {to an LTV of 95% for SFH or duplex and 90% for a triplex or quadruplex}.
RBC and CIBC are the best banks in Canada period.. I wouldnt go anywhere else for a mortgage
Originally posted by @Justin Kane:
im curious how different canada lending is to american
Don't even consider it BC and Ontario have 15% foreign tax on real estate. You will be in the hole from day 1
One thing I will tell you is if you get a loan from an A lender in Canada. We have 5-6 major bank and not like 100s in the US.. If you get the loan straight from the bank with no broker. Your only fee from the bank is the appraisal in most cases which is like $300 for residential. US Banks gauge your A hole open.. % this % that, fee this and fee that.. New York State has a 1% fee on all loans..
@Steven Coppola
I don't see why not! Make sure to speak to a local broke to see your options.. sounds like a great plan.. I hope they give you a nice family discount ha ha.. and that would be a great way to start getting the bug.. good for you!
@Hai Loc seems like you know a lot about financing what would be the best option to finance a duplex in Ontario at just over $200,000
Originally posted by @Cole Black:
@Hai Loc seems like you know a lot about financing what would be the best option to finance a duplex in Ontario at just over $200,000
I am not a mortgage broker but I know enough about financing. Duplex in Ontario will still be under a single family conventional mortgage so 20% down should be enough but I have seen others get approved for 10% and pay the CMHC.. Problem is in Ontario when you are leveraged that high you will likely be having negative cash flow. Something I would never consider..