Mortgages for First Time Homebuyers have their advantages. There are programs offered by the government to assist you in making the process easier as well as more affordable.
First-Time Homebuyer Incentive
The First Time Homebuyer Incentive assists you by reducing your monthly mortgage payments thereby making your home more affordable.
The Government of Canada will secure a 5 – 10% equity in your home. There are no payments required for their portion of the equity. The equity is paid back upon sale of the home or after 25 years, whichever comes first.
If this is a program that you may be interested in, contact me for further information. Qualifying guidelines can be reviewed at the Canadian Housing and Mortgage Corporation.
The Homebuyers Plan allows a First Time Home-buyer to borrow up to $25,000 from your RRSP for your down payment. This is tax-free, however must be paid back within a specific period of time to avoid paying the taxes. If you are purchasing with another individual who is also a First Time Home-buyer, you can both borrow from your RRSPs for a grand total of $50,000.
Property Transfer Tax Exemption
In BC, when a property is purchased, property transfer tax is payable. As a First Time Homebuyer you are eligible for an exemption up to a purchase price of $500,000. It is calculated at 1% on the first $200,000, 2% of the purchase price in excess of $200,000 and 3% on the purchase price over $2,000,000.
For more specific details, contact me or qualifying guidelines can be reviewed at Government of Canada Taxation Department.