First Time Homebuyers
Buying a home for the first time can be a very overwhelming and confusing process. Fortunately, there are a lot of solutions, unique to every individual’s case, which allows first time buyers to proceed with their acquisition.
First time homebuyers often need the right and professional guidance that is unique to their individual situation. There are many ways to purchase a home if you are a first time homebuyer. The Canadian government has established two well-known programs that allow more buyers to purchase their first home. Also, the provincial government has established a first time homebuyers land transfer tax rebate. However, there are many other solutions outside of these three programs if you are looking to buy your first home. For professional advice and a free assessment of your individual and unique situation please call Harpreet Singh The Mortgage King at (416) 795-1919.
The following programs are designed for first time homebuyers with limited resources:
Less Than 20% Down
The first program that the Government of Canada established was the “less than 20% down” option. Initially, this was only available to first time homebuyers, but currently anyone can take advantage of the program. The minimum down payment for a home purchase is 5%, which is a lot better than the initial requirements of 20%. However, there is a catch to this program, being that the mortgage has to be insured against default. Recently, there has been another limitation put in place stating that a borrower can only have one registered mortgage with default insurance, meaning that any additional purchases will require at least a 20% down payment.
For more information on mortgage default insurance please view our Insurance› page or our Mortgage Features› page. To have a look at the current premiums Click Here› or to calculate how much your premium will be have a look at our CMHC Insurance Calculator›
The Canadian Government has established The Home Buyers’ plan to allow first time homebuyers to use up to $25,000 from their RRSP to purchase or build a qualifying home. For a couple, this can be up to $50,000. The home must be located in Canada and be the buyers’ principal residence. You will have to repay the withdrawal within a period of 15 years by yearly installments. If you do not repay the amount due for a year, it will have to be included in your income for that year.
For more information on The Home Buyers’ plan please visit This Page› on the CRA website.
Land Transfer Tax Rebate
In Ontario first time homebuyers are eligible for a land transfer tax rebate of up to $2,000. However, there are requirements such as:
You must be at least 18 years old
You must occupy the home as your principal residence within nine months of the date of transfer
You cannot have ever owned an eligible home, or an interest in an eligible home, anywhere in the world
If you entered into an agreement of purchase and sale before December 14, 2007, the eligible home must be newly constructed and you must be eligible for the Tarion New Home Warranty
For more details and instructions on how to take advantage of the rebate please visit This Page› on the Province of Ontario’s website.
For a more in-depth and professional review of your individual and personalized situation please give Harpreet Singh The Mortgage King a call at (416) 795-1919.