- Hey, it's Nolan Matthias from Mortgage 360.
We're gonna talk today about
the First-Time Home Buyer's plan,
which, not gonna be a long video,
not gonna be a complicated video
because, quite frankly, we can't find a reason
to take advantage of it.
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and we'd like to be that source so that
people aren't getting fooled by things like
the First-Time Home Buyer program,
so let's get into it.
Don't need to do a deep dive into this subject.
Don't need to get into the numbers.
The reason why is because, quite frankly,
the program just doesn't make any sense.
Basically, for a purchaser who's buying
a $400,000 home, the savings of taking advantage
of the program is gonna be maybe 100, $150 a month,
but that same purchaser already qualifies
for at least the amount of mortgage that they're getting,
and can more than afford the property that they're buying,
so the question becomes, why would you create
an equity partnership with the government
for part of your home when there's no reason
for you to do so?
It's not like you're buying more house.
You can afford the house you need.
You're basically just saying, "Okay, here, take 5%,"
"or 10% of my property, and the equity,"
"and we'll just see what happens in the future."
Maybe the property value will go up.
Maybe it'll go down, but at the end of the day,
you're creating a business partnership
with the government, and here's the thing
about creating a business partnership with the government.
If you're creating a business partnership
with another individual, well,
the rules are really clear.
You both have to do what's fair, but in this case,
the government gets to make the rules,
and we don't know what's gonna happen
25 years down the road, when your mortgage is paid off,
and you've got this $25,000 loan that, essentially,
you paid off to, or made with the government,
the agreement you made with the government,
and we don't know how you're going to have to pay that back.
You're gonna have to refinance your house,
or start making payments to the government,
and more importantly, what if they decide
to change the rules?
What if a different government comes into place?
Maybe the conservatives take over, or the NVP,
or the Green Party, and they go out and change the rules,
so any time you're getting into a business partnership
with somebody who gets to make the rules,
it just doesn't seem like it's a business partnership
you should be getting into,
and let's call a spade a spade.
This is being touted as an interest-free loan,
or an equity share, and it's not interest-free.
It's not anywhere close to interest-free.
Come on, if you are giving up part of your equity
and part of the upside of the value of your property
to the government, there is an infinite amount
of possibility of how much interest
you're gonna have to pay.
In fact, this whole process, this whole product,
you could end up paying more in equity
than what it would've cost you to actually pay
the interest on the mortgage,
so we just think this is an all around bad deal.
It was, in my mind, put together
as a vote-buying tool.
I'm a-political by nature.
I really don't care, but what I do believe in
is good ideas, and bad ideas,
and what I clearly can tell you about this
First-Time Home Buyer program, aside from
the increase of being able to take
$35,000 out of your RSP instead of only $25,000,
the actual equity share piece is what I would call
unequivocally a bad idea, so I don't think
we're gonna see anybody taking advantage of it
at Mortgage 360 because we believe in transparency,
honesty, and the honest conversation
is going to be, this is not a good idea for anybody,
but we'll see what happens.
If somebody comes to us and says,
"Hey, we really wanna take advantage of this,"
we'll get them the mortgage because, ultimately,
we guide the process.
The client makes the decisions, but our best advice
is avoid this process, and avoid this product
at absolutely all costs because bad ideas are bad ideas,
good ideas are good ideas, and this is a bad one.
Again, do me a favor.
If this information was helpful, insightful,
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Cheers.