In today's hot real estate market, where demand is much higher than supply and pricing wars have become a norm and houses are selling for thousands of dollars above the asking price, many are wondering how they will ever be able to afford their own home.
For many young couples and first-time home buyers, the dream of purchasing their own homes is diminishing. Their plights have been seen and heard by those in the Government and who have worked on ways to ease the burdens of first-time homebuyers.
The Canadian Government has an incentive program in place that can assist those who are purchasing a house for the first time.
The program offers people across the country the opportunity to purchase their first home by offering 5 or 10% of the home purchase price towards a down payment.
When you add this amount to your own down payment amount, it will lower the cost of your mortgage carrying cost, making owning your home more affordable. This allows borrowing less on your Mortgage.
It is a shared equity mortgage program. This means the government will share in the gains or losses of the home when you decide to sell.
For example, if the purchase price is $400,000 and you received $20,000 (5%) from the government and the value of the home goes up to $450,000 when you sell, you will repay the government $22,500.
In the same way, if you received $40,000 (5%) and the house value decreases to $350,000 at the time of sale, you will repay the government $17,500.
Canada Mortgage and Housing Corporation has announced that effective May 3rd, 2021, the government has expanded the criteria for those who are eligible in Toronto, Vancouver, and Victoria (hot real estate areas).
The qualifying annual household income has increased from $120,000 to $150,000.
The borrowing amount has increased from 4 times the qualifying income to 4.5 times.
With this plan in place, it will make it easier for those who are looking forward to owning their own home someday.
Give me a call and we can discuss how I can help you achieve your goal of owning your own home today.
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