That’s really a great question.

Of course we’re not giving you money if you do mortgages, but what happens is there is a program with the banks that allow people to do what is called 100% financing. There have been some more rules since March 2011 and some banks are no longer offering this process, but what happens is that you actually finance that 5% over the next 5 years. So rather than getting a 3.19% on a 5-year closed mortgage, you’re looking at a 5.44% and that helps you finance that 5% down.

So now you’re going to have to get some money from some source, not borrowed for your down payment of 5% and then when the mortgages closes, which means you’ve moved into the house, then the lender allows you to have the 5% back and so they give it back to you after the fact.

Catch Bill Macklem of Dominion Macklem Mortgages at BilliMac.com every Saturday morning at 10am on the AM650 Radio Real Estate Show in Metro Vancouver with host Tom Lucas and Sheri Brown.