couple sitting in front of house

Looking to buy your first home? You’re not alone! Many prospective buyers are keen on finding the right property for their budgets and home ownership goals. When it comes to both, working with an experienced mortgage broker in Ottawa can make it easier to cross the threshold into a new chapter without introducing financial stress.

That’s where we come in at The Mortgage Advisors, helping first-hime home buyers make a well-informed decision and narrow down the best possible options. Whether you need a hand with making sense of paperwork, choosing the right mortgage product for your needs or otherwise, we’ll be glad to assist! Not only that, but we’ll point you in the direction of incentives, programs, and other offers that are available to first-time home buyers.

Why Work with a Mortgage Broker?

When you work with a certified and fully licensed mortgage broker, it’s easier to narrow down choices and find the right solutions for your budget and needs. Feel free to ask questions, clear the air on terminology, and get to know the mortgage products available from lenders today, as our team is happy to provide ample insights and recommendations. Not only that, but working with a mortgage broker means having an experienced, certified professional who knows the market by your side, helping you apply for pre-approval, utilizing lender connections, and securing the best possible rates.

We can assist with the following and more:

  • Review of credit qualifications
  • Discuss your affordability and budget
  • Roadmap for optimal down payment and closing costs
  • Analyze available mortgage options and provide informed recommendations

Our team will also work closely with inspectors, lawyers, lenders, and other professionals commonly associated with home purchases, keeping you up-to-date as we move through the process. Also, feel free to use our very own Mortgage Calculator tool.

How to Qualify as a First-Time Home Buyer in Canada

Every program available to first-time home buyers in Canada has its own unique terms and conditions. You must meet the qualification criteria in order to make use of it, though many such programs share similar criteria when it comes to your age, citizenship status, and other factors. For example, with federal programs including the First Time Home Buyers’ Tax Credit and the RRSP Home Buyers’ Plan, these options share the following requirements:

  • Applicants must be aged 18 or older
  • Applicants must either be a Canadian citizen or permanent resident
  • The property in question must be located in Canada
  • Applicants haven’t owned a home in the last four years
  • Applicants haven’t lived in a residential property owned by a married or common-law partner in the last four years
  • Applicants must prove with appropriate documentation that they have purchased the property in question
  • Applicants must use the property as their primary residence within one year of the purchase date

Programs and Benefits for First-Time Home Buyers

When purchasing a home for the first time, buyers tend to benefit from additional incentives. The Canadian government offers a variety of incentives for first-time home buyers in the form of tax credits, rebates, grants, and programs. Some of these benefits may also be applicable to individuals who are selling their current home and are interested in buying a new one.

First-Time Home Buyers’ Tax Credit/Land Transfer Tax Rebate

Depending on where you live, when purchasing your first home, you may be able to take advantage of tax relief options. The First Time Home Buyers’ Tax Credit, for instance, can be claimed on your annual return for the year that you purchase your home, providing a rebate of $750. First-time home buyers may also be eligible for a rebate of land transfer taxes, pending their meeting qualification requirements. The maximum rebates available will vary by location, as indicated below:

  • City of Toronto: $4,475
  • BC: $8,000
  • Ontario: $4,000
  • PEI: $2,000

Home Buyers’ Plan

The RRSP Home Buyers’ Plan allows first-time home buyers to borrow from the savings they’ve put into a Registered Retirement Savings Plan (RRSP) for a down payment. You’re allowed to withdraw up to $35,000 from your RRSPs for a down payment, which then needs to be paid back within 15 years. Of course, there’s also a risk of cannibalizing your savings, increasing the risk of financial stress at the time of retirement. Weigh the pros and cons, don’t be afraid to research this option further, and feel free to reach out to us if you’d like to discuss it in more detail.

GST/HST New Housing Rebate

When a home is built in Canada and sold, it will have GST or HST added to the sale price. The GST/HST new housing rebate reimburses part of this tax’s federal or provincial component. The rebate is only valid for use on new homes, construction of a house on land that you own, or for renovations to your existing property. While first-time home buyers tend to make use of the rebate for brand-new properties, it’s not exclusive to them.

First-Time Home Buyer Incentive

This incentive helps to reduce the cost of regular mortgage payments to first-time home buyers. It provides contributions in the form of 5% or 10% of the property’s total cost, which then needs to be repaid by the homeowner within 25 years. As a first-time buyer taking advantage of this incentive, you’ll be able to save a lot of money by the time your mortgage is fully paid off. Of course, be sure to brush up on the qualification guidelines in advance, as they can be strict.

First time home buyers moving into new home

Frequently Asked Questions

How much will I need for a down payment?

For first-time home buyers, the down payment is the first thing you’ll need to consider before purchasing. In Canada, you must pay a minimum of 5% as a down payment for homes of less than $500,000. If the purchase price is between $500,000 and $1 million, you’ll need 5% of the first $500,000 and 10% on the amount between $500,000 and $1 million. For houses over $1 million in value, the minimum down payment required is 20%.

Do I have to make a down payment on a home?

Yes. You cannot purchase a residential property without the minimum 5% down payment.

Are the current mortgage rates going to change?

Rates are a moving target and depend upon market and economic factors from day to day. You can get a preapproval or rate hold for up to 120 days while you search for your home that will lock in a rate for your requested term. Choosing a fixed-rate mortgage product would lock in your rate for that fixed term. When choosing a variable or adjustable-rate mortgage, your rate and payments could fluctuate throughout the term in question. Let us help review your options to determine which choice best suits your needs.

Why should I use a Mortgage Advisor?

With the help of our friendly, knowledgeable, and dedicated mortgage experts, you can maximize the value of your home investment. We make it easy to narrow down options, review your credit score to determine whether you qualify, collaborate on down payment and closing cost plans, and determine what works best for your budget.

What kind of salary do I need for my first home?

There are several factors that influence whether you’ll be able to afford a property you have in mind as your first home. These include your annual income, credit score, the annual income of other household members (such as a spouse), the terms and conditions of your mortgage (including the rate), and your debt to income ratios. Discussing your budget and needs with a Mortgage Advisor helps to ensure that you can make a well-informed decision.

Ready to speak to a Mortgage Advisor about your first time home buyer mortgage options?

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