HOME BUYING MADE EASY!
First Time Home Buyer Benefits
Buying Your First Home Is Special
Buying your first home is probably one of the biggest decisions you will ever make. It can be very exciting and intimidating at the same time. There are lot of things to be considered when you are buying your first home and a small mistake can cost you big. The good news is that there are certain first time home buyers benefits that you can avail. Here is all you need to know about first time home buyers benefits, and some important tips that can help make things easy.
1. Hurdles first time home buyers face
People often face a lot of challenges when buying their first home. Some of the key obstacles that first time home buyers face include:
- Low income
- High pricing of housing
- Saving up for down payment
Despite the challenges, first time home buyers have a few advantages over the other buyers. There are certain incentive schemes that first time home buyers can take advantage of.
2. First time home buyers benefits
Canada Mortgage and Housing Corporation (CMHC) Canada’s housing agency launched the First Time Home Buyers Incentive (FTHBI) in 2019. It is a first-come-first-serve scheme aimed at providing eligible buyers with an interest free incentive towards their down payment, which enables them to reduce the monthly mortgage repayment. This effectively makes the purchase of a new house more affordable.
Under the scheme, the first time home buyer can receive 5% of the price on a resale home or 5% or 10% of the price of a resale home. The idea behind the scheme is to encourage home construction in order to fill the supply shortages in Canada. The home buyers need to repay this incentive either when they sell their home or at 25 years, whichever comes first. The buyers can also repay this amount at an earlier date, without any pre-payment penalty. The repayment amount is calculated on the market value at that moment in time.
3. Are you eligible for First Time Home Buyers Incentive (FTHBI)?
Talking of first time home buyer benefits, the actual first timers are not the only beneficiaries. The FTHBI scheme is also available to people who have gone through a divorce or those who have not lived in a home that they owned or their spouse of partner owned for the last four years. To be eligible for the scheme, the first time home owner should:
- Have a household income of less than $120,000: This includes not just your salary but also income from rent and investments.
- Have the minimum down payment: You need a minimum 5% down payment for the first $500,000 of the purchase price and 10% of the amount above that.
- You can borrow less than 4 times of your qualifying income: This means, you can borrow a maximum of $480,000.
4. Tips for first time home buyers
Buying your first house can be quite overwhelming. There is excitement of moving into your own home coupled with the insecurities associated with making a huge investment. Here are some simple tips that can set you on the right path.
5. Pre-qualify for mortgage
Before you start looking for a home to buy, you should get in touch with a lender and get your mortgage pre-qualified. This will give you a clear picture of how much you can afford and the types of home you should be considering.
6. Set your budget carefully
When you are setting a budget for your home, do not simply look at the amount your bank is willing to lend. This amount is based on the debt-income ratio and this is not the amount you should be spending on buying your home. This is important because you need to leave some room for other expenses associated with home ownership and also your lifestyle costs. After all, the cost of owning a home month-to-month is much more than just your mortgage payments. You need to factor in other costs into your budget such as insurance, utilities, property taxes and maintenance. Apart from these costs, you will also need to consider other costs such as internet, phone, television and more.
7. Hire a real estate agent
An experienced real estate agent can make your home buying process a lot easier. Find a real estate agent who can answer all the questions you may have. The agent should have good knowledge of the local real estate market and should be well aware of the first time home buyers benefits.
8. Do your research
9. Get a real estate lawyer
You will not need a lawyer right at the beginning of your search, but it is important that you identify your lawyer well in advance so that you have one ready the moment you have found your dream home. Your real estate agent should be able to help you with a lawyer or you can seek recommendations from family and friends.
On the day of possession, take a walk around the house to make sure everything is as per the contract. Check the furnace and other appliances and see that they are in working order as agreed upon. In case there is a problem, you can notify the lawyers. The seller is legally bound to remedy the problem before the keys are exchanged (or after).
Need help with home buying in Calgary? Our trusted and experienced real estate partners can guide you through the whole home buying process whether you are a first time home buyer or real estate investor to help you find the right home for your family or business needs on budget and on specification!
10. Taking the possession
Once you have completed the paperwork, you should book your movers at least a few weeks before you are ready to move in. You should not leave it for the last minute as you may not get any bookings for as long as a few weeks. Make sure all the maintenance is complete before you move in.
If you need help buying your first home, you have reached the right place. We will not only help you find the home of your dreams but we will also ensure that you avail all possible first time home buyers benefits. We understand how much your first home matters to you and we will make sure your home buying journey is pleasant and hassle-free.
Whether you are looking to buy your first home or downsize, they can not only guide you through the process, current market trends but also advise to best suite your individual needs. Contact us for more information about buying real estate in Calgary, Alberta