Wouldn’t it be nice if buying a house was as simple as exchanging keys? But for a lot of very good reasons, it’s not that easy. And it seems like it’s only becoming more and more difficult, especially for first time home buyers.
Buying your first home is one of the largest investments you’ll ever make in your life. It sometimes comes off like a faraway notion, but there are programs now offered by the Government of Canada to help you become a homeowner.
The series of incentives the government has introduced demonstrates their commitment to help with housing affordability.
First-Time Home Buyer Incentive
I’m sure you know that struggle when you want something so bad, but you don’t know how you’ll ever afford it and make it work out. It’s like being a kid again and desperately wanting a new toy that your parents will never buy for you and you have to somehow figure out how to get it yourself. This is that feeling that every new home-buyer gets. But thankfully, you no longer have to face it alone.
The FTHBI program was designed to assist qualified first-time home buyers without adding to their financial burden.
As expected, there are some requirements to be met in order to be eligible for this program. You will need to be able to meet the minimum insured mortgage down payment, but your household must also have a maximum combined income of $120,000. The program does have a price cap on the house. It will apply up to a house price of $505,000 with an assumed 5% down payment.
What does this mean in regards to Vancouver home prices?
Everyone knows the average house price in Vancouver ranges up to $1 million. This is high enough to make almost anyone bite their lip and cringe, feeling a bit of financial agony. But the government has assured that there are still options around Vancouver. The homes might not be located in the thick of the city’s action, but in the greater area surrounding the city.
What about inflation? How will it be affected?
As we all know here in Vancouver, inflation is a scary thing. The cost of homes has flown upwards in the past at what many people feel is a ridiculous rate. It’s hard to imagine how anyone can afford to be a new home owner in Vancouver. But the Canadian Mortgage and Housing Corporation has denied that the FTHBI would have any effect on inflating home prices. They say that the program has been calculated to avoid such an issue.
The CMHC have said in a recent statement, “We have carefully targeted the FTHBI to help younger Canadians having trouble affording home ownership. The program is capped at $1.25 billion over three years… We do not expect the FTHBI’s inflation effect to be beyond a maximum of 0.2-0.4 per cent.”
I meet the requirements, now what?
When you meet all the requirements for the FTHBI, the next step is to apply! The incentive officially launches on September 2, 2019. This incentive is specifically for first-time home buyers. This means that you, or your partner cannot have previously owned any kind of property. If you’re not sure if you actually qualify, then take a look on the government of Canada’s website to see their list of requirements for yourself.