Mortgage Calgary

Have you been enticed by those Low Down Payment Mortgage ads you see in Calgary?

You’ve seen them, advertisements boasting low down payment or $1,000 down or even no down payment.

Buyers who can’t qualify for a home loan from a traditional lender are offered the opportunity to purchase a property for a low down payment and low monthly payments.

Buyers responding to these ads are often not told the price of the property, which is usually inflated. Instead, the seller asks how much money the buyer has for a down payment. If their down payment is not large enough, the seller suggests arranging for a second mortgage from a private lender to make up any shortfall.

The private lender is usually someone connected to the seller and the second mortgage is usually at a very high interest rate.

The buyer may be told that they will be able to assume an existing mortgage or that the title of the property will be transferred later.

If the buyer is unable to make the payments, the property goes into foreclosure. The buyer is left homeless and still on the hook for the outstanding balance on a mortgage that is worth more than the market value of the house.

From Service Alberta