September 21, 2017

First Time Homebuyers

Isn’t it exciting, you are looking to purchase your 1st home!  This will probably be the largest investment you will ever make.  You need to take some steps to prepare you for this new venture.  I specialize in educating my clients by providing all the facts to assist them in moving in the right direction towards Home Ownership.

The first thing is to prepare a budget and find what amount is comfortable for you taking into consideration the mortgage payment, property taxes and utilities on the home.  We will also discuss your source of income; where you work, your monthly income and your amount of down payment along with your credit history.  If there is anything derogatory on your credit rating, we can work on correcting any credit blemishes.   Once we know your comfort level, we can prepare a pre-approval so you can confidently go out looking for your home in a specific price range.

As a first-time homebuyer, there are a few programs/benefits available to you:

  1. The Home Buyers’ Plan (HBP) – allows first-time homebuyers to withdraw funds from your RRSP, individually $25,000 or $50,000 with a spouse tax-free.   You must repay all withdrawals to your RRSP’s annually within 15 years
  2. First-Time Home Buyers’ Tax Credit – can claim a tax credit of up to $750 on their income tax.  Reference:  http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html – q1
  3. GST/HST New Housing Rebate – you may qualify for a rebate based on your purchase price or cost of building your new home.

Reference: http://www.cmhc-schl.gc.ca/en/co/buho/buho_009.cfm

COSTS AND FEATURES

  • For 1-2 units up to 95% financing: For 3-4 units up to 90% financing
  • Maximum amortization: over 80% financing, 25 years: under 80% financing, 40 years
  • Property must be suitable for year-round occupancy, properties on an island must have year-round bridge or ferry access
  • Time-share interests, life leases and properties in rental pools are not eligible
  • Maximum Purchase Price: $1,000,000
  • Must be intended to occupy property within the year by the borrower or a relative of the borrower, rent free basis
  • Credit Score: 650-680 GDS/TDS: 35%/42%: over 680 GDS/TDS: 39%/44%

 

Family Plan Program

This program enables people to help buy a home for immediate family members who have good credit but lack the income to meet the necessary debt servicing requirements.

  • A parent helping a child buy a home
  • A parent helping an adult child while studying at a post-secondary education facility
  • A child helping their elderly parents buy a home who are on a fixed income
  • This program does not include the purchase of non-owner occupied investment properties

Applicants buying a home for a family member must have clean credit, stable employment and income, positive net worth and a down payment from their own resources.

COSTS AND FEATURES

  • For 1-2 units up to 95% financing: For 3-4 units up to 90% financing
  • Maximum amortization: over 80% financing, 25 years: under 80% financing, 40 years
  • Property must be suitable for year-round occupancy, properties on an island must have year-round bridge or ferry access
  • Time-share interests, life leases and properties in rental pools are not eligible
  • Maximum Purchase Price: $1,000,000
  • Must be intended to occupy property within the year by the borrower or a relative of the borrower, rent free basis
  • Credit Score: 650-680 GDS/TDS: 35%/42%: over 680 GDS/TDS: 39%/44%