OK, OK, I’m finally writing my first blog! I must admit I am feeling a little, no, a lot intimidated right now as I think the “blogosphere” is already filled with people far more intelligent than me!

I’ve been told to write about anything and everything. I talk all day so this should be easy.

A friend mentioned in his first blog that at least his Mom would read his posts. My Mom doesn’t own a computer and doesn’t want one!

Hopefully my random thoughts will strike a chord with you. If they do, great! If not, I will print them and show my Mom.

Do I Really Need A Down Payment?

Yes … and … No. Currently the minimum down payment required to purchase a home is 5% of the Purchase Price. With house prices hitting all time highs this amount can be a daunting amount to save.

There are options!

The most widely used resource for first time homebuyers is The Bank of Mom and Dad. A family member can “gift” funds to be used for down payment. An advance of an inheritance is an acceptable gift as well. What if this isn’t a possibility? Surprisingly there are still a few lenders who will provide cash back (3 – 5%) at closing and allow these funds to be used for down payment. Tighter lending guidelines have reduced the number of lenders participating in these programs. You must always remember that you get nothing for free! You will be paying for these funds with a higher interest rate and if you want to pay out the mortgage before it comes due you will be paying a portion of the funds back.

Another source of down payment funds is your RSP. All first time buyers are able to withdraw up to $25,000 from their RSP without paying tax and use the money for down payment. This money does have to be repaid to your RSP and the funds do have to be in the RSP for a minimum of 90 days prior to withdrawal.

So, to answer the question, Do I Really Need A Down Payment?

Yes you do, BUT, No it doesn’t have to be saved and there are some options available to secure these funds.


Whew! That wasn’t so bad!  I will show it to Mom when I see her!