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First Time Home Buyers |
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Introduction
Purchasing your first home may sound like a daunting task. There are so many things to consider - Can you afford it? Where to live? Is it better to own or to rent? How do you get a good mortgage interest rate? Should you pay down your mortgage quickly or take an extended amortization? Should you lock-in your interest rate or should you take a variable interest rate? I'm sure you'll have more questions.As specialists with first time home buyers, we answer all your questions, get you pre-approved and work with you and your professional team of real estate professionals to obtain your home at the best rates and worry free. There is no cost to using a mortgage broker.
If you are in the Vancouver area, we encourage you to come in to the office for a free consultation to get pre-approved or just to ask questions and explore your options. If you're ready to purchase, we can work on your pre-approval on the spot. Click here to learn more about our unique approach to getting you a pre-approval . If you're not sure as to whether to purchase, you are also welcome to come in for an informational meeting. You can discuss your situation and ask all the questions you like. There's no cost or obligation to this. This is just something we do as a service to the public.
Why buy?
Everyone has their own reasons for purchasing. They boil down to economic reasons and non-economic reasons.Studies have shown that home owners are several times richer than renters. This is because property values have continued to increase during the past few decades. While there may be a correction now, this is a trend that will reverse within the next year or so. The second wealth builder for home owners is that mortgage payments are forced savings. After a while, home owners get accustomed to the monthly payments. What was initially a large monthly payment will eventually become normal (especially if your income increases). There are mortgage calculators that compare Renting vs. Buying. These calculators assume that you'll invest difference between the mortgage payment and the rent. Although this makes sense in theory, most renters do not have the discipline to invest the difference between the mortgage payment and the rent payment.
There are non-economic reasons for purchasing as well. Here are some of the reasons: (1) More stable living arrangements; (2) Not wanting to deal with difficult landlords; (3) You want to make renovations; (4) You want a place to call your own.
Is owning a home right for you?
Home buying is not for everyone. Here are some reasons why some people do not purchase:- They like to move around often. The transaction costs of buying and selling a home can be expensive. If you plan to move often, it may make more sense to rent.
- They do not have good credit or down payment - This will cause some difficulties in obtaining a good mortgage.
- Your income is not yet stable.
Government benefits for a first time buyer
There are two benefits to provided to first time home buyer in British Columbia (BC).BC Property Transfer Tax exemption
The BC Property Transfer tax is equivalent to 1% of the first $200,000 of the purchase price and 2% of the amount above $200,000. This is a significant amount of money levied on any real estate transaction. For example, for a $300,000 purchase, the transfer tax is $4,000. As a qualified first time home buyer, you will not have to pay this tax. Pls. click here to read more about the BC Transfer Tax.Home Buyer's Plan
This is a programme offered by the Federal Government that allows you to use up to $25,000 ($50,000 for spouses) of your Registered Retirement Savings Plan (RRSP) towards the down payment on a home. You can withdraw this money tax free from your RRSP. You'll need to pay back this money to your RRSP over the next 15 years. To learn more, please visit http://www.bcmortgage.ca/forms/home_buyers_plan_info.pdf to download the home buyer plan information package.Notes
The definition of a first time home buyer under the Federal Home Buyer's Plan and the BC Property Transfer tax exemption is different. Under the provincial programme, you cannot have owned a home ever. With the Federal Government, you could have owned a home but not in the last 5 years (approximately).
Secondly, please be sure to check with your notary or lawyer before as to specifically what benefits you are entitled to. Government regulations change often so the information on this web page may be outdated.
"My job is done when you know your options"
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