Investor · Grand Prarie, Alberta · Member since 2015 · 12 posts · 3 votes
Ok so i purchased my first SFH 2 years ago as my primary residence, put 5% down. Lived in it for 8 months and it's been a rental since. I purchased my 2nd SFH last year as a secondary primary residence, put 5% down and rented it out since day 1. I went through the pre approval process with my mortgage broker and she pre approved me to buy another property with 5% down. She told me because my current properties are rentals i can buy a primary residence again as long as i live in it (yeah right lol). My first house does have 20% equity because of appreciation. Is my broker wrong or are we allowed to keep buying primary residences for 5% down and turn them into rentals? I live in Alberta.
Well Andrew, since you're not worried about mtg fraud, I suggest you just buy 3 or 4 at the same time, using owner occupied financing for all of them. Let us know how that works out for you. And your defense will be "but I told everybody I was lying on the application, they didn't stop me, so it's okay!".
in 2011 we bought our first house 90 minutes away because of a job transfer. We went through CMHC at 5% down. Job transfer fell through so we decided to rent out the house (we never lived there). We informed our contact at the lender (TD) in an email and they forwarded that to the person who handled our application at CMHC. They responded informally (via email though) that it was no problem but that we did the right thing by informing them.
A couple years later (2013), we did move, but because the rental was doing so well, we just decided to buy another house. We went through the same lender and informed CMHC, again about what was going on and they responded, again, that they had no issues and we could get another mortgage at 5% down.
Based on this, I would assume it's the "wrong" thing to not directly inform them. We didn't have to refi the first property because we didn't live there, but I think that was their discretion at the end of the day.
The rules changed in 2014 though, so you can only have one 5% mortgage through CMHC. Doesn't mean you can't use their other products, but I would be careful so that this doesn't catch up with you.
The rules changed in 2014 though, so you can only have one 5% mortgage through CMHC. Doesn't mean you can't use their other products, but I would be careful so that this doesn't catch up with you.
Jake:
You are allowed to have only one high-ratio (either 10% or 5%), CMHC insured mortgage, at a time - the program rules have always been such.
Hi Roy, you are right. In 2014 the change was actually that you are limited to 1 homeowner product (of any type) regardless if they are high-ratio or not.
That said, we definitely did have (and still have) 2 CMHC high-ratio mortgages at one time (and they were aware and okay with it). I think it had more to do with their discretion than the rules though.