The new Government Program may be easier understood through examples. Each week I will post an example to help explain how the program works for those first-time buyers who are considering utiliziing this Canadian government incentive for their first purchase here. Here's a first example:
LET’S LOOK AT A SPECIFIC SITUATION
"Anita wants to buy a new home for $400,000. Under the First-Time Home Buyer Incentive, Anita can apply to receive $40,000 in a shared equity mortgage (10% of the cost of a new home) through the program.
This is on top of the minimum required down payment of $20,000 (5% of the purchase price) from her savings.
This lowers the amount she needs to borrow and reduces her monthly expenses. As a result, Anita’s mortgage is $228 less a month or $2,736 a year.
Years later, Anita has sold her first home for $420,000. At this time, she would now have to repay the original incentive she received as a percentage of her home’s current value. This would result in Anita repaying 10%, or $42,000 at the time of selling her house."
(Info from Capital Lending Centre. contact me for a mortgage broker here)
The best buyers are well informed and it's my goal to ensure the buyers I work with have the knowledge to act decisivily when purchasing a home.