2 minute read.
Purchasing a home as a first-time homebuyer can be a challenge. With high housing prices and substantial down payments, homeownership can seem like an impossible goal. The First-Time Home Buyer Incentive program is designed to make purchasing a house more affordable for first-time buyers in Canada.
Here are a few things you should know about this new program.
1. The Amount of Money You Receive Depends on The House
2. You Will Have to Repay the Money
The incentive is not free money. You will have to repay the money you receive. Luckily, you do not have to make payments right away and there is no interest. According to the guidelines, you will have to repay the incentive after 25 years of living in the property or after selling it — whichever comes first.
Your repayment is based on the property’s market value. This means that if you receive 5% of the home’s purchase price, you would pay back 5% of the current market value of the home at the time of selling.
3. You Must Meet Certain Requirements to Apply
Not everyone can apply for this incentive. There are many eligibility requirements you must meet to receive approval. These include:
- You must meet all down payment requirements being a minimum of 5% down to a maximum of 20%
- Make less than $120,000 a year
- You are not borrowing more than four times your income, meaning a maximum of a $480,000 mortgage
Additionally, you also must meet one of the following:
- Be a first-time homebuyer
- Are recently divorced
- Have not lived in a home you have owned for the past four years
The First-Time Home Buyer Incentive makes owning a home more of a possibility for many Canadians. It will help reduce the monthly mortgage amount without putting borrowers in a difficult financial situation. The only question is, can you find an affordable home close enough to your business to make it work? If you have any further questions regarding the incentive, please reach out. I would happily go through the program with you in person.
Are you a first time home buyer ready to move to a homeowner? Click here to see how Knowledge Broker can help you start this incredible journey.
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