There are many firsts in life that you will never forget, and buying a home is one of them. While you know the result will be rewarding, getting there can be scary. With the right plan, it doesn’t have to be. Whether you’re newly married or recently graduated, know what is available in terms of first time home buyer incentive programs.
Those looking to make the leap from renting to buying should also pay attention to these incentives and take advantage of them. As a first-time home buyer in Alberta, many incentive programs are available. Knowing what is out there will help take off some financial stress and help you purchase your first home.
Creating A Plan
Saving for your future mortgage is one of the first steps in purchasing a home. But how much is enough? This is where a mortgage specialist comes in. They can make sure you are saving enough without throwing out your current lifestyle. Creating a savings plan is one of the first things you’ll want to do. For example, paying off credit card debt and changing bad spending habits are good places to start.
Home Buyers’ Plan
The Home Buyers’ Plan (HBP) is a program made by the Canada Revenue Agency for first time home buyers. It allows you to withdraw funds from your Registered Retirement Savings Plans (RRSP). In addition, you are given 15 years to pay back the funds.
Funds can come from over one RRSP as long as it does not exceed $35,000 in a calendar year. This means you and your partner could both contribute from your respective RRSPs. To be eligible for the HBP you must be a first-time homebuyer who is a resident of Canada. You must also have a written agreement to buy or build a qualifying home for either you or a related person with a disability.
First-Time Home Buyer Incentive
The First-Time Home Buyer Incentive is a Government of Canada program. It aims to help qualified first-time homebuyers purchase their first home. The program offers five or ten percent of the home’s purchase price to put towards a down payment. Therefore, reducing monthly mortgage payments to help more Canadians become a homeowner.
Eligibility requirements for the incentive include:
• Having Less Than $120,000 Total Annual Qualifying Income
• Your Total Borrowing Does Not Exceed Over Four Times Your Qualifying Income
• Being A Canadian Citizen
• Alternatively, Being A Permanent Resident Or Non-Permanent Resident Allowed To Work In Canada
• Meeting The Minimum Down Payment Requirements From Savings, RRSP, Or A Non-Repayable Financial Gift From A Relative/Immediate Family Member
Alberta Resident First Time Home Buyer Programs
There are several Alberta specific programs also worth looking in to.
Attainable Homes Calgary Program
The Attainable Homes Calgary Program is specific to Calgarians who seek affordable homeownership options. The program works by providing down payment help. Individuals, couples, and families can be eligible. Since 2009, the program has helped 1000 Calgarians meet their homeownership dreams.
The second program is the Residential Access Modification Program (RAMP). RAMP helps low-income Albertans with mobility challenges. You can apply for this grant if you need to make renovations. However, renovations must include ways to make the home safer or more accessible. The program offers a grant of up to $7,500 per person each benefit year. Eligibility includes those living with progressive neurodegenerative disease or uses a wheelchair. Income thresholds are also considered.
Public Essential And Key Workforce (PEAK) helps middle-income people buy a home. PEAK is divided into two categories, those with dependent children and those without. For those with no dependent children, you must have a household income of up to $80,000. However, for singles or couples with dependent children, the income threshold is $90,000. Moreover, PEAK is a down payment help program for those who don’t have resources for a 5% down payment.
Mortgage Specialists Are Here For You
Above all, the biggest thing to remember is to take your time. Don’t rush into decisions either. If you are purchasing a home with a partner, clear communication is important. Make sure both people agree on the house being purchased, the plan to save and purchase, and have realistic wants and needs. Be patient with yourself and your partner. Rushing the process could lead to regret later on.
Know that being a first-time homebuyer doesn’t have to be done alone. Federal, provincial, and municipal incentive programs are available and worth looking into. While there are many incentive programs out there, they can be hard to understand. Working with an experienced mortgage broker will save a lot of time and confusion.
In conclusion, write all your questions before meeting with a mortgage specialist. Ask how incentive programs could benefit you. They will be with you every step of the way. Being a first-time homebuyer should be an exciting and rewarding process.
At the Mortgage Group Calgary, we have a team of some of the best mortgage brokers in Calgary. We provide mortgage solutions based on expertise and experience to best fit your financial situation. Contact us today for a consultation on how you can get on track to becoming a homeowner.