Mortgage Guide: First Time Home Buyer Incentive

If you’re a first time home buyer entering the Windsor real estate market we’ll be covering another incentive here that could help get you a home. We spoke about the Home Buyers’ Plan in our previous post and this one will cover another incentive intended to assist getting you into a home. Once your Windsor REALTOR® helps you sort through Windsor houses for sale, you get your offer accepted, and you get to the mortgage stage, the First Time Home Buyer Incentive might be an option for you.

First, let’s go over what the incentive provides to those who qualify. The incentive allows those who qualify to get a shared equity mortgage with the Government of Canada. A shared equity mortgage means that the government offers you additional financing but without interest. This can help you to reduce your monthly mortgage payment but at the same time you do not need to increase your down payment. Through the incentive the Government of Canada offers 5% of the purchase price of an existing home. For new builds the incentive is 5% or 10%. Finally, the incentive must be repaid after 25 years or when you sell the property.

In order to be eligible for the First Time Home Buyer Incentive you must meet the following criteria:

Your total qualifying income does not exceed $120,000
Your total borrowing is no more than 4 times your qualifying income
You or your partner are a first time home buyer
You meet the minimum down payment requirements with traditional funds. I.e. savings, withdrawal/collapse of a Registered Retirement Savings Plan (RRSP), or a non-repayable financial gift from a relative/immediate family member.
The incentive is like a second mortgage, your main mortgage must be greater than 80% of the value of the property. You are also subject to a mortgage loan insurance premium. The mortgage must also be eligible through Canada Guaranty, CMHC or Sagen.

The First Time Home Buyer Incentive is another great mortgage incentive provided by the Government of Canada to help first home buyers enter the current real estate market and have more success in getting into a home. Make sure you discuss with your lender if this program is right for you. For more information on the First Time Home Buyer Incentive CLICK HERE. To see if you are eligible for the First Time Home Buyer Incentive CLICK HERE.

Here at Jump Realty our agents will give you honest advice on what course of action is best for you in their professional opinion and will always put taking care of your best interests first! With offices in Windsor, Tecumseh, Kingsville, and Chatham, no matter where you are, a Jump agent is ready to help. Please contact us for any housing needs and let us give you a better real estate experience!