Buying your first home is a major life event. The thought of buying a new home can be overwhelming. Where do I start? Who do I talk to? What can I afford? 

There are simply so many choices out there right now, it's understandable that making these major life decisions can be an intimidating process

In the guide below you'll find help and information on topics that cover many aspects of buying your first home.

Although it can be overwhelming at times, buying a home is one of the most satisfying choices a person can ever make in their lives and it's such an exciting time.... have fun finding the home of your dreams. I would be very pleased to help you through the process.

Special Programs for First Time Home Buyers

Buy Your Home With 5% Down

Hundreds of First Time Home Buyers purchase their first home with only 5% down. The 5% down program was initially set-up for qualified First Time Home Buyers but has recently been made available to everyone, providing they qualify. As all mortgages that are above 80% of the purchase price must be insured with default insurance (CMHC or GE Capital insurance premiums), CMHC insurance fees of 2.75% of the mortgage amount will be added to the mortgage in this case. i.e. a $250,000 mortgage = a $6875 insurance premium added to the mortgage to make the total mortgage $256,875.

This program has probably been the most successful program that has made home ownership easier and attained earlier than most people could have otherwise. Contact a mortgage specialist for any questions you may have.

Using Your RRSPs for Down Payment of a Home!

The Home Buyers' Plan (HBP) is a program established by the federal government that allows an individual, who is a qualified first-time home buyer, to withdraw up to $25,000 tax-free from their RRSPs (that's $50,000 per couple) to buy or build a qualified home, located in Canada and be the buyer's principal residence. It's actually a great way to buy your first home. The borrower must be a resident of Canada and must not have previously participated in the Home Buyers' Plan. To participate, you must complete "Form T1036" and take to institution that holds your RRSPs . These forms are available at the institution or at Income Tax offices.

If you participate in the Home Buyers' Plan, you must, however, repay the amount you withdrew within a 15-year period in the amount of 1/15 per year. If you repay less than the amount you should repay, that difference is then added to your taxable income on your income tax return and you are taxed at your tax rate.

 Free Money for First Time Buyers

How would you like to get free money? Well, if you are a First Time Buyer or you haven't owned a home in the last 5 fiscal and you have not previously participated under the Home Buyers' Plan, here is a strategy to FREE MONEY. Simply use your unused RSP limit, with your own savings or getting an RSP loan and keep it for at least 90 days. If you fall in the 40% tax bracket, on a $3,000 RSP, you would get a $1,200 income tax refund. Once you are ready to buy, and 90 days have passed, you can remove it under the Home Buyers' Plan. If you had a RSP loan, simply collapse the RSP and pay off loan, but you're still getting the income tax refund.

The Cash Back Mortgage

Some mortgage companies offer a cash back mortgage. They provide you up to 5% of the mortgage amount back to you on the closing date of your transaction. So in this case the lender provides the 95% financing and a further 5%-- therefore you only need your closing costs- so you have now bought your home with NO MONEY DOWN.

Well of course there is a catch..... for this situation you can expect your mortgage rate to be higher—so not always the best option.. but in many cases the extra $100 per month in mortgage payments is not an issue... and it gets you in your home sooner!!

ONTARIO Land Transfer Tax Refund for First-Time Home Buyers

Land Transfer Tax applies to all transfers of land in Ontario.

First-time homebuyers may be eligible for a refund of all or part of the tax. The refund applies to all homes, whether newly constructed or resale.

How much is the Refund?

The maximum amount of the refund is $2,000. If the refund is claimed at time of registration, it may offset the land transfer tax ordinarily payable. If not claimed at registration, the refund may be claimed directly from the Ministry of Revenue. No interest is paid on this refund.

Examples

     Cost of home         Tax Payable       Tax Refund        Net Tax Payable

       $100,000                    $725                $725                   $0

       $200,000                   $1,725             $1,725                 $0

       $300,000                   $2,975              $2,000               $975

Who Qualifies?

To claim a refund, you:

First-Time Home Buyers’ Tax Credit – Up to $750

To assist First-Time Home Buyers with the closing costs related to purchasing your FIRST HOME.

Receive up to 15% of up to $5000 of your closing costs back as a tax credit at the end of the tax year. Maximum claim is up to $750.

An individual will be considered a first-time home buyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the calendar year of the home purchase or in any of the four preceding calendar years.  

Rules Governing Canada Back Mortgage Insurance ... Feb 16, 2010

This morning, Federal Finance Minister Jim Flaherty announced prudent changes to mortgage insurance rules intended to come into force on April 19, 2010:

1.    All borrowers must meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term;

2.    The maximum amount one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one's home; 

3.    Non-owner occupied properties will require a minimum down payment of 20%.

There were no changes to down payment requirements or length of amortizations for owner-occupied residences.

Research Shows Canadian Mortgage Market can Manage Risks . . . Feb 2010

New research data collected by the Canadian Association of Accredited Mortgage Professionals

(CAAMP) suggests that Canadian mortgage lenders and borrowers, including first time homebuyers,

are being extremely prudent with their borrowing and lending.

Key findings of CAAMP’s research include:

• Eighty-six per cent of homebuyers chose fixed rate mortgages. This share fell late in the year as

variable rates became more attractive (at 2.25 per cent compared to four per cent for fixed rates).

• Among borrowers who chose fixed rates, a significant number opted for longer terms – less than

five per cent chose terms of two years or less. Twenty per cent took three year terms, five per cent

four years, leaving 70 per cent with a fixed rate for five years or more.

• The vast majority of people who took out their first mortgage last year borrowed less than they

could afford to, as their Gross Debt Service (GDS) ratios are far below allowed maximums, even

at the higher interest rates that are used to qualify them for their mortgage.

• The high share of fixed rate mortgages and low GDS ratios for homebuyers are contrary to

perceptions that consumers and financial institutions are taking on more risk.

 

New Rules for "High Ratio" Mortgages ...Jan 2011

The new rules are only aimed at “high-ratio” mortgages where someone is borrowing at least 80 per cent of the value of the property, these changes will likely affect all mortgages in short order.

To review the new rules:

1. Maximum amortization has been reduced to 30 years from 35 years. Compare that to the previously available 40-year mortgages and interest-only mortgages, with no forced payment of any principal.
2. When you want to refinance your mortgage, you can now borrow up to 85 per cent of your property value, down from the 90 per cent available in 2010. Before 2010, you could have borrowed up to 95 per cent.
3. The government will no longer provide insurance backing on home-equity lines of credit.

To read CAMMP’s research report click here.

You can access free mortgage and homebuying information in a “Mortgage Toolkit,” developed by The Financial Consumer Agency of Canada (FCAC) specifically for potential homebuyers. FCAC’s free publications and tip sheets are packed with information on mortgages to help homebuyers make the best financial decisions to meet your specific needs. 

Unlike other similar tools offered by financial institutions, the practical, useful information from the FCAC is independent and unbiased. FCAC also has online tools available at www.moneytools.ca including a mortgage qualifier and mortgage calculator. While the mortgage qualifier lets consumers see if they can afford a mortgage, the calculator shows what type of mortgage is right for them and what kinds

As well as providing you with the house of your dreams, real estate has proven to be a solid investment over the last 25 years. According to reports, residential housing values in virtually all major Canadian centres have posted significant gains since 1981.

Scotia Bank Report

     Call for an appointment

Let's sit down together so that I can understand what you  and your family are looking for. 

ofc: (519) 797-5500

Direct: (519) 270-3055

Useful Links

Southampton & Port Elgin property listings 

To Rent or Buy 

List of community clubs and organizations

Local Newspaper - Shoreline Beacon

Schools

 Buying a home resources

Bruce County tourism web site

Southampton tourism web site

Town of Saugeen Shores 

Local Resources - lawyers, contractors, home inspectors etc.

Restaurants

A great Bed & Breakfast

Accommodation

golf

Maps

Community links