First Time Homebuyers Incentive: What is it and will you benefit from it?
So it's a program from the government of Canada designed to help borrowers decrease
their monthly mortgage payments by having one of the default insurers CMHC,
Genworth or Canada Guarantee contribute 5% towards your resale home or 5 or 10%
towards a new built home and this new build can be a condo a townhome or a
single-family home now this contribution you don't have to make any interest
payments on it and it's fully payable 25 years from the day that you get your
mortgage or when you sell your home.
Now it's important to note that the
government shares proportionally any future gains or losses in the value of
the home. So let's just say for example your home is worth $300,000 at the time
of sale and they contributed 5%, well five percent of three hundred thousand
is fifteen thousand dollars so whether you've made money or you're negative
equity that is the amount you're obligated to pay back now what are the
requirements there's four things to note: First is you have to be a first-time
homebuyer or you haven't owned a home in the last four years.
Second is your
mortgage must be default insured. Third you have to have a minimum of 5% down
and fourth your mortgage qualifying amounts cannot
be more than four times your annual income. Now this can be a problem let me
give you an example for those that don't know I'm a mortgage broker and realtor
and I'm working with these clients on the mortgage and real estate side and
they make an annual income of $85,000 four times that income they can only
qualify for about three hundred and forty-three hundred forty-one thousand
dollars but if we didn't go with this program they can qualify at the normal
qualifying rules of 375 that is a difference of thirty-four thousand
dollars which to them is a big deal because it gets them into the next level
of homes thirty four thousand dollars a lot it can get you a more upgraded home
I could get you in a better location so that doesn't work out for the particular
clients that I have so it's gonna be interesting to see how this program
turns out because BC actually rolled out a similar program back in twenty sixteen
and they just didn't have enough participation in the program so they had
to cancel it if you have any questions about seeing if this program is the
right program for you give me a call we can work out the numbers find out
exactly if this program is a good fit for you or not and then we can kind of
go from there if it doesn't work out then the best that will happen is we can
get you pre-approved and it locks in your rates it protects you from rising rates
so saving you potential future interest and that's the first and most important
part of the home buying process so if you have any questions feel free to
comment down below or you can reach out to me. My name is Felix Chan
with the LiveInnerCity real estate team helping you keep real estate simple.