Great News for First Time Buyers
More government incentives that can help bring home ownership dreams to reality!
The First Time Buyer Incentive Program
The First Time Home Buyer Incentive helps qualified first time buyers reduce their monthly mortgage carrying costs without adding to their financial burdens. Up to 1.25 billion dollars has been set aside to help lower mortgage costs for eligible Canadians, on a First Come First Service Basis.
Buyers will need to have a minimum down payment to be eligible, which can be from your qualified R.S.P. Just keep in mind this is a C.M.H.C. insured mortgage program. Total down payment is to be “less” than 20% down. You can then apply for the 5% Down Payment Incentive, giving you an extra 5% down on resale purchases or 10% on new construction. Simplified, this is a shared equity mortgage program with the Government of Canada.
The Incentive funds will be a second mortgage on title. There will be no regular principal payments, no interest and has a maximum repayment term of 25 years or sooner if the property is sold. You can repay the Incentive at any time without a prepayment penalty. However, the repayment is based on the property’s fair market value.
The Government will share in the upside and downside of the property value upon repayment. Essentially the government is re-paid by their shared equity from the value of the property.
The incentive enables first-time home buyers to reduce their month mortgage payment without increasing their down payment. The incentive is not interest bearing and does not require ongoing payments.
Through the First-Time Home Buyer Incentive, the Government of Canada will offer:
5% for a first-time buyer’s purchase of a re-sale home
5% or 10% for a first-time buyer’s purchase of new construction
An example, you receive a 5% incentive of a resale home that you purchase for $480,000, and you receive a $24,000 incentive, then perhaps your home value increases to $600,000 your payback would be 5% for the current value which would be $30,000.
Details and Services
For more First Time Home Buyer Incentive Program Details download more information below.
Who Can Apply?
- Canadian citizens, permanent residents, and non-permanent residents who are legally authorized to work in Canada
- Borrowers must have a maximum qualifying income of $120,000
- Total qualifying income must be $120,000 per year or less
- This is subject to qualifying income requirements set out by lenders and mortgage loan insurers
- At least one borrower must be a first-time home buyer
For more First Time Home Buyer Incentive Program Details download more information below.
Home Buyers Government Incentives – Down Payment Program
A simple example would be if your combined income is 120,000 x 4 the maximum purchase price would be $480,000 plus your 5% down payment and the 5% incentive down bringing it up to $528,000.
Higher price if working with 10% down incentives bringing it to over $570,000.
At the turn of the year, You may have become first-time home buyers. As a result of ongoing lobbying efforts, Budget 2019 included not only an increase
to the withdrawal limit for the Home Buyers’ Plan (HBP), but also an expansion of eligibility criteria through a redefinition of what the federal government considers a “first-time home buyer.”
As of January 2020, your are eligible to participate in the HBP or the First-Time Home Buyer Incentive (FTHBI) if they have lived separate and apart from their spouse or common-law partner for a period of at least 90 days as a result of a breakdown in their marriage or common-law partnership. This measure allows individuals experiencing significant life changes to continue benefiting from the stability of home ownership.
The HBP is a program that allows first-time buyers to withdraw funds from their Registered Retirement Savings Plans (RRSPs) to buy or build a qualifying home and allows them to pay back the withdrawn funds within a 15-year period. The HBP withdrawal limit was increased from $25,000 to $35,000 after March 19, 2019.
The FTHBI is a shared-equity mortgage program where the Government of Canada offers a 5 or 10% down payment on a first-time buyer’s purchase of a newly constructed home, or 5% for a resale (existing) home, for a corresponding stake in the property. To qualify, participants’ annual household income cannot exceed $120,000 and their borrowing must not exceed more than four times their income. The program was launched in September 2019 and is still accepting applications.
Call us today for more details at 416-428-8311 for this and other Government Programs available to help you with Home Ownership. Funds are limited, and timing is important, so please ensure to get all the details for a well-planned home purchase.
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