Zero Down Mortgage

Definition

  • Also known as "no money down", the "zero down" mortgage is a mortgage where 100% of the property is financed. Zero down refers to the amount of down payment required to finance the property which in this case is nothing. A Zero down mortgage will require a higher credit score, and may have a higher interest rate and a higher CMHC premium when compared to a conventional or high-ratio mortgage.

Synonyms
no down payment, no cash down, 0 money down, 100% finance

Alternate Spellings
No Money Down, Cashback, 0 Down, Zero Downpayment, Cash Back

Related Terms and Acronyms

  • Cash Back Mortgage Definition, Important,
    • A mortgage that provides the borrower a lump sum cash payment.
  • Creative Financing Definition,
    • An innovative or unusual way of structuring a home loan that allows the buyer to buy the house.
  • Down Payment Definition,
    • The portion of the purchase price a buyer pays, in cash, at the time the loan originates.
  • GE Capital Company,
    • GE Capital is the new CMHC alternative in the Canadian Mortgage Market place. GE Capital like CMHC provides banks/lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure GE Capital assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "CMHC."
    Also offers commercial financing.
  • High-ratio Mortgage Definition, Important,
    • A mortgage in which a borrower places a down payment of less than 20% of the purchase price.
  • Loan-to-Value (LTV) Acronym, Very Important,
    • The ratio of the principal amount of the loan to the lesser of the purchase price of the property or the property's appraised value. This can be expressed as an 80% loan, or 80% LTV.
    A widely used term in the mortgage brokerage and lending industry, especially by mortgage underwriters.
  • Low-down Mortgages Definition, Important,
    • Mortgages with a low down payment, usually less than 10 percent.
  • Low-down-payment Loan Definition,
    • A mortgage where the borrower puts down a small amount and borrows a high percentage of the purchase price.
  • Maximum Financing Definition,
    • A loan given for a property where the buyer puts down the lowest allowable down payment possible.
  • Mortgage (mtg) Abbreviation, Important,
    • A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
  • Mortgage Brokerage Definition, Very Important,
    • An individual or group who brokers deals between their clients and lenders.
    CanEquity is a mortgage brokerage.
  • Mortgage Insurance Definition, Very Important,
    • A policy covering a mortgagor from which the benefits are intended (a) to pay off the balance due on a mortgage upon the death of the insured, or (b) to meet the payments on a mortgage as they fall due in the case of his death or disability.
    • Insurance that protects a lender if a homeowner fails to pay off his or her mortgage.
    CanEquity offers mortgage insurance.
  • Mortgage Lender (ML) Acronym, Very Important,
    • A lender that offers mortgages, often through a mortgage broker.
    Used internally by mortgage brokers and mortgage lenders.
  • No Money Down Mortgage Definition, Important,
    • Available in Canada as a true 100% mortgage financing product.
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