FIRST TIME HOME BUYERS

First-Time Buyers represent the largest group of purchasers in today’s real estate market. Recognizing this, Lenders and Insurers have developed progressive ways to allow for many Canadians to purchase their first home, which would otherwise not have been possible under traditional programs. The most common program utilized today by First-Time Buyers is the 95% high-ratio financing program through both the Canadian Mortgage and Housing Corporation (CMHC), and Genworth Financial (formerly GE Mortgage Insurance). Learn more about High Ratio Mortgage Insurance.

There are other programs available for First-Time Buyers in order to assist them with the purchase of their first home. Applicants are often enticed by some lenders with 5% down by offering cash back programs for the down payment or for the purchase of appliances etc. Just be aware that these mortgages are offered a significantly higher than discounted rates, and the cash back is pro-rated in the case that you re-finance your mortgage.

There are also programs available through Genworth Financial and secondary mortgage lenders through a self-insured program, that allow for 95% financing with higher premiums for the greater risk they take on these types of transactions.

These can vary significantly and applicants should consult with a mortgage professional for details on how these programs work. CMHC also permits first-time buyers to borrow their 5% from any other source under certain conditions. For further assistance in understanding these programs and how they work, please feel free to contact us at 416 989 1000.

Minimum down payment requirements for non-owner-occupied homes will increase to 20% from 5%, and the way that rental income is considered has been scaled back as well. This rule will have the most dramatic impact of all three changes, but only on real estate investors.

The Home Buyers' Plan (HBP) is a program that allows you to withdraw up to $25,000, from your registered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability. For more information please click on the link: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html

If you buy land or an interest in land in Ontario, you must pay Ontario's land transfer tax. If you are a first time home buyer, you may be eligible for a refund for all or a part of the tax. For more information, please follow this link. http://www.rev.gov.on.ca/en/tax/ltt

Land Transfer Tax Calculator:

 http://www.torontorealestateboard.com/LTT_splash/ltt_calculator.html