Everyone has to qualify on the 40% ratio. All payments made (like total mortgage payments, taxes, heating, and any other payments) cannot be more than 40% of your gross yearly earnings. So, if someone was on a pension, or permanently disabled, as long as they have good credit and falls within the 40% ratios, they can buy a home.
"RRAP" is a program for low income people who own homes, but can't afford to fix up a major item, such as a furnace, water heater etc. The applicant is already a home owner and applies directly to CMHC.
"Purchase Plus Improvements" is a CMHC program that enables the purchaser to buy a home with money added for renovations. For example, buyer wants a $200,000 home, but it needs a new kitchen, furnace, windows, or whatever. He has to get quotes for the improvements from reputable contractors. Say the quotes come in at $10,000. The mortgage is then $200,000 plus $10,000; less a minimum 5% down on the $210,000. On closing, the mortgage company holds back the $10,000 until the renovations are done and inspected by a qualified appraiser. The buyer must have access to $10,000 to get the work done and inspected. Then when completed, the $10,000 costs are reimbursed to the buyer.
First time home buyers are Land Transfer Tax exempt.
Risk factors: bankruptcy history, bad credit, unemployed, on social assistance or unemployment.
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