Programs Available For First Time Home Buyers

Buying a home is incredibly hard, especially if you’re a first-time homebuyer. It is such a big investment that you have to spend a lot of time bothering about the paperwork, fees, and other technical things involved in it. 

Jordan St. Pierre-The Mortgage Centre knows how trying this process can be and wants to help first-time homebuyers by giving them a stress-free way to enter the housing market. Many first-time buyers are not aware that they have the ability to use their RRSPs tax-free for a down payment along with a program that offers a downpayment incentive. 

RRSP Home Buyers’ Plan (HBP) - The Home Buyers’ Plan (HBP) is a program that allows you to withdraw funds from your Registered Retirement Savings Plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability. The HBP allows you to pay back the withdrawn funds within a fifteen-year period. First-time home buyers are able to use their RRSPs for their downpayment tax-free for up to $ 35,000. 

Using your RRSPs as a downpayment may be a great option as you have the ability to draw from some of your existing resources. Even if you already have enough money for a downpayment, it still makes sense to access your RRSP savings through the HBP. Certain conditions must be met in order to be eligible to participate in the HBP. 

Unless you are a person with a disability or you are helping a related person with a disability buy or build a qualifying home, you have to be a first-time homebuyer to withdraw funds from your RRSP(s) to buy or build a qualifying home. You are considered a first-time home buyer if, in the four-year period, you did not occupy a home that you or your current spouse or common-law partner owned.

First-Time Home Buyer Incentive - The First-Time Home Buyer Incentive makes it easier for you to buy a home and lower your monthly mortgage payments. This program is a shared equity mortgage which means that the government shares in the upside and downside of the property value. This allows you to borrow 5 or 10% of the purchase price of a home. 

You then pay back the same percentage of the value of your home when you sell it or within a twenty-five-year window. Just as the name implies, this incentive is for first-time homebuyers. Your property must also be located in Canada and must be suitable and available for full-time, year-round occupancy to avail of this incentive. Your home is for you to live in and cannot be used as an investment property. 

You are considered a first-time homebuyer only if the following conditions are met: 

• You have never purchased a home before
• You did not occupy a home that you or your current spouse or common-law partner owned in the last four years (the four year period begins on January first of the fourth year before the incentive is funded and ends thirty-one days before the date the incentive is funded)
• You have recently experienced the breakdown of a marriage or common-law partnership (even if you don’t meet the other first-time homebuyer requirements). 

If you are interested in learning more about this, reach out to me at (780) 953-7314, or email me at jordan@modernfinance.ca. When applying for a mortgage, just ask about this service and I won’t hesitate to help you out at no cost to you. If you do not have gifted funds or savings for your downpayment, and you don’t want to add on to your debt, then this is the perfect solution for you. To learn more about the services I offer, click here. If you have any questions about Jordan St. Pierre-The Mortgage Centre, I would be happy to answer them for you, get in touch with me by clicking here.