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Great News for First Time Home Buyers

First Time Home Buyers Incentive

New First Time Home Buyers Incentive

What Does the First-Time Home Buyer Incentive Have to Offer?
Great news for first-time homebuyers! The new federal First-Time Home Buyer Incentive (FTHBI) officially opened for business on September 2nd (for home sales that close no earlier than November 1st). 
So, how can this help you?

The FTHBI is designed to help ease mortgage costs for first-time homebuyers, meaning it will lessen monthly payments by providing shared-equity home loans of up to 5% toward the down payment of a resale home and as much as 10% for newly-built homes. The idea is that, by boosting the size of your down payment, the FTHBI decreases monthly mortgage costs, making homeownership more affordable.
As we’re all painfully aware, it has become increasingly difficult for many people, particularly first-time homebuyers, to enter the housing market over the past few years. This is due to a variety of factors but, most notably, tighter mortgage rules implemented by the federal government – including the notorious stress test qualification measures. 
How does the program work?
The FTHBI is a shared-equity mortgage that provides first-time buyers with the ability to lower their borrowing costs by sharing the cost of buying a home with Canada Mortgage and Housing Corporation (CMHC). 
This translates to homebuyers taking out smaller mortgages. While there are no ongoing or monthly pay-back requirements, the loan must be repaid when the house is sold or within 25 years, whichever comes first. 
Who can benefit?
As with any program, there are certain stipulations that are important to keep in mind while considering this mortgage option. 
The program is only available to first-time buyers with annual incomes of $120,000 or less. Additionally, the mortgage amount and FTHBI amount can’t exceed four times the annual household income. 
Do you have questions about opting for a shared-equity mortgage, or your Red Deer mortgage options in general? We are happy to discuss all of your down payment options for buying your first home. Contact Brandi Pierik, Red Deer Mortgage Broker with Dominion Lending Centres. Answers are just a call or email away!

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