Introduction
Mortgages are financial assistance providers. They provide financial assistance and services to customers for buying homes and exchanging properties. In mortgages, customers keep the property as collateral. If the buyer fails to repay the mortgage amount, the mortgage will take off the property to cover the loss.
Mortgage services have an inevitable part in the real estate business. People are using financial assistance from the mortgage to invest in the real estate business. Buying a new home and purchasing a large property needs financial support. Mortgages lend their customers a large amount of money to meet their financial needs.
Mortgages provide some incentive schemes and interest offers to first-time home buyers. The incentive scheme aims to support young people get their dream of purchasing a home. The mortgage has some terms and conditions to make you eligible for the first-time buyer incentive scheme. We will discuss the topics one by one.
First-Time Home Buyer Incentive ( FTHBI )
Buying a new home is exciting but also expensive purpose. The Canadian government provides some incentive schemes to citizens for first-time home purchases. The government and mortgage services work together and allow the citizens to enjoy the incentive in their home purchases. The amount you could receive depends on the property type you purchase.
The incentive scheme promotes the youth Canadians to get independent. The Canadian government provides interest-free loans of up to 10 percent, and in return, they share in any gains or losses of the property value. The First-time home buyer incentive program has offered by the Canadian mortgage and housing corporation. This program offers eligible home buyers a shared-equity mortgage with the Canadian government.
With the help of first-time home buyer incentives, you can reduce the monthly mortgage payment and manage your budget perfectly. The government aims to protect its youth from unusual debt and help them to build savings habits. The percentage of the incentive may change by the type of the property;
- A newly built home – 5% to 10 %
- An existing or resale home – 5%
- A new prefabricated home – 5%
- An existing prefabricated home – 5%
Payback Of The Loan Amount
First-time home buyer incentive is a loan, not a grant amount from the government. The incentive reduces the mortgage repayments and allows some interest offers on your loan. The customer needs to repay the amount in a limited period. The customer should pay back the amount if he sells the house in 25 years.
The government needs the customer to follow some rules to opt for the incentive scheme;
- The first-time home purchase incentive can use only for your primary residence purchase. The customer can not use the incentive scheme for his investment purpose. The government ensures the purpose of the purchase before allowing the incentive offer.
- There will be no penalty for your early repayment of the loan. The government allows the customers to pay off the loan as fast as possible to benefit them from the interest amount.
- Choosing the government scheme might rule you out. Then you can not use the other grants or incentives available at the provincial and municipal levels.
How Do You Know You Are Eligible?
The customer should be a first-time home buyer. The customer has not bought a home before and must not live with the current spouse or partner who has owned one in the past four years. The customer will be considered a first-time home buyer after getting divorced.
The government criteria to apply for the first-time home buyer incentive are the following;
- The annual income of the customer must be less than $120000.
- The customer should pay at least five percent of the downpayment.
- The mortgage should be more than 80% of the property value.
- The customer needs to take mortgage insurance, and the property must qualify for mortgage insurance.
- The customer must be a Canadian citizen. The government provides this incentive scheme only to Canadian citizens.
- A non-permanent resident with permission to work in Canada can also apply for the incentive.
If the customer sells the house within twenty-five years, the customer must repay the amount to the government.
Conclusion
The Canadian government and housing corporations provide lots of helps and support to its citizens to make their dream come true. The government allows the customer to live in a comfortable zone and avoid unwanted debt from their life.
The mortgage lends their customers a lot of money to purchase their dream homes. The government supports mortgage customers to pay their mortgage repayment. For first-time home buyers, this is a piece of great news to buy their dream home. A good mortgage provider can help the customer to get eligible for the first-time home buyer incentive scheme. With the support of the best mortgage and the incentive scheme, you can purchase your dream home.
