New First Time Home Buyer Incentive
Buying a home made easy through the New First-Time Home Buyer Incentive Program
The New First Time Home Buyer Incentive Program has good news to all potential first-time home buyers! Now’s the best time to prepare your savings and application documents to finally fulfill your dreams of getting your own home. The federal government acknowledges that the middle-class and the younger middle-class largely contribute to the economic growth of Canada. Despite that, they are the ones who can’t afford to live in a home they could call their own. With the rising mortgage rates and stricter
mortgage implementation, they turn to nearby provinces to settle and purchase a much affordable property.
So, if you belong in a middle-class household, there’s a good chance you can finally purchase your first home this year. Social Development Minister Jean-Yves Duclos shared the details of the First-Time Home Buyer Incentive Program in an interview with Global News Canada yesterday, June 17, 2019. He revealed that the government aims to help middle-class and younger middle-class families to afford their first-home even in large urban centers like Toronto and Vancouver. They want to cultivate communities to be more inclusive.
How does the First-Time Home Buyers Incentive Program work?
Through the First-Time Home Buyers Incentive Program, middle-class families will be able to purchase their own home with a lower monthly mortgage payment without the burden of shelling out a sizeable amount for down payment. Potential first-time home buyers can then choose from these offers:
- 5% incentive for first-time home buyers who wants to purchase an existing home
- 10% incentive for first-time home buyers of a new construction or new home
So, say, you want to buy a newly constructed home worth $450,000. When you apply and get qualified for the program, you will receive $45,000 from the government. This is 10% of the cost of your home. Aside from that, you also have to pay a 5% minimum down payment required, which could cost you $22,500.
With this arrangement, you will just have to pay $___ for monthly payment. This could save you $____ a month.
This program also creates a different kind incentive for real estate developers and builders. They will begin to address the needs of middle-class families demand to have more homes that would suit them.
How can I qualify for this program?
By the name of the program itself, you must be considered a first-time home buyer. You must then meet the following qualifications to be considered:
- You did not had your own home and never purchased a home.
- Went through a divorce or break up with your spouse or partner.
- You did not occupy a home owned by your spouse or partner in the last four (4) years.
To qualify, the total maximum income of your household must not exceed $120,000. You should also have to be qualified for an insured mortgage with the Canada Mortgage and Housing Corporation (CHMC). You also have to make sure you present substantial proof that you are willing and capable of paying your monthly mortgage payment.
How will I be able to repay for incentive program? When you avail of the First-Time Home Buyer Incentive, you are entitled to a penalty-free repayment. However, you must repay the incentive after 25 years or when your home officially gets sold.
The total amount you have to repay should be based on your property’s current market value. For instance, you were able to enjoy 10% of $45,000 for your home worth $450,000. If the market value of your property increases in 25 years, you should be able to repay 10% of its current fair market value. Let’s say, your $450,000 home is now worth $550,000. Then, your repayment should amount to $55,000. If your property decreases in market value over time, then your repayment amount also decreases.
The Canadian government will be allocating $1.25 billion in three years for the First-Time home Buyers Incentive. This is to cater to as much first-time home buyers as possible. This program will then be officially available to the potential first-time home buyers on September 2, 2019. But take note, this will be a first-come first-serve basis! If you really want to qualify for the program, it’s best to start searching for a home that could fit your style and budget
and prepare your savings for your down payment.
We bet there’d be lots of potential first-time home buyers who will be interested in this.
So, let us get you prepared!
Ready To Gain Your First Time Home Buyer Incentives?
Faizal Garasia, CSC, CPH, FP1, LLQP, PFSA, RP
Mortgage Agent, Commercial Mortgage Agent, Leasing Agent
8901 Woodbine Ave, unit 225
L3R 9Y4, Canada
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