The Government of Canada launched the First Time Home Buyer Incentive Program. It helps qualified families inch closer to their dream house. Lindsay Labrecque of Spire Mortgage shares everything you need to know about the program and the strategy to pay it off.
First Time Home Buyer Incentive Program Qualifications
The incentive is for families with a maximum household income of $120,000.
Those who are eligible can have up to four times the amount of their annual income. If you are making $120,000, you can loan a maximum of $480,000.
Going into a partnership with the government to get a house also means sharing its equity with them.
For Lindsay’s rental homes, the government is her silent joint venture partner. They give her a down payment, and she has to pay back the loan amount plus any equity built in the properties.
The market is depressed, and it will be for a little while. This means that there’s a great opportunity for first time home buyers willing to put the work in to pay off quickly.
If you qualify, you will get an additional 5% for your down payment, so you have a total of 10%. It works best if you have other loans that put you over the debt servicing threshold. This would take people out of the market because of their debt servicing ratio.
Plan & Create a Solid Strategy
Having a little extra down payment decreases your debt servicing ratio. This will enable you to buy properties. The trick is, how do you get out of it?
Lindsay warns not to do renovations on your house under the home incentive program. Since it’s a shared equity program, you have to share any bump in your house value to the government.
You have to pay back the original investment, plus whatever shared equity is in that. Talk to your lender partners, ask, "Would this help if I did this?" You have to fully know that you have to pay that off as soon as possible. If lenders see a massive bump in prices and values, they won't be giving that money away.
If you use this program, be sure to understand your exit strategy as it is a shared equity program with the government.
Do Your Research and Ask for Help
If you're a first-time buyer considering purchasing, have a household income of $120,000 or less, and you need a little bit of a bump on your down payment, this First Time Home Buyer Incentive Program is a perfect thing that you should consider.
Don't just say it's out there and forget about it. Go down the roads, and ask the questions. You might surprise yourself. This program might help you set foot in the home you want to get into and achieve your dream house.
If you need more details about the program or need assistance, you can reach out to Lindsay at (403)-703-3019 or at firstname.lastname@example.org. You can also find lots of information at spiremortgage.ca.