Good News for First Time Home Buyers (FTHBI Program) – Government Incentive

The Incentive enables first-time home buyers to reduce their monthly mortgage payment without increasing their down payment.

Its big challenge for the younger generation and new people to buy a home with affordable price, with current market it almost impossible. So, with this new government program they can buy or find a good place to live without having too much burden of monthly mortgage.

First Time Home buyers have Government incentive now to get qualified for monthly mortgage to ease their financial burden every month. let’s have some information about the incentive here what exactly you can get as an incentive and what is the procedures and requirement of it.

There are certain criteria to meet

– To get eligible you need to have minimum down payment

– Maximum certified income should be not more than $ 120,000

– Total incentive is limited to 4 times of your certified Income

If you can match these criteria then apply for 5% or 10% shared equity mortgage with Govt of CANADA. The incentive is of 4times of qualifying income. The combined amount ( the incentive + down payment) should not exceed 4 times of total certified income. The maximum threshold for debt ratios are GDS 39% and TDS 44%. Is only applies to the first mortgage and is subject to requirements by lenders and mortgage loan insurers. The Government of Canada will share in the upside and downside of the property value upon repayment.

The incentive will reduce over burden of monthly mortgage by adding their share to the down payment money and without carrying any interest and does not require ongoing repayments.

First-Time Home Buyer Incentive, the Government of Canada will offer:

– 5% for a first-time buyer’s purchase of a re-sale home

– 5% or 10% for a first-time buyer’s purchase of a new pre-construction

The repayment of incentive is as easy as it. You have to repay the incentive after 25 years unless you sale your property before. The incentives repayment is depending on property’s fair market value. The home buyers can repay money in full anytime without any penalty and refinancing of mortgage not gonna trigger repayment but before selling the property home owner must get approval.

You receive a 5% incentive of the home’s purchase price of $200,000, or $10,000. If your home value increases to $300,000 your payback would be 5% of the current value or $15,000. in short you get 5% incentive and give 5% back.
You receive a 10% incentive of the home’s purchase price of $200,000, or $20,000 and your home value decreases to $150,000, your repayment value will be 10% of the current value or $15,000.

The borrower has to meet minimum down payment requirements with some legal sources such as savings , RRSP , or having help from family, by taking the incentive , the borrower might not have to save as much of down payment to be able to afford the payments associated with mortgage.