Love is in the air, everywhere we look around!
February is the month of romance and the McGarr Realty Team is loving it! Whether you celebrated an engagement over the holidays or you plan to surprise your special someone for Valentine’s Day, this is an exciting time to be planning your future as a couple.
And is there a more picturesque place to get married than here in Niagara? Niagara has held the title of “Honeymoon Capital of the World” for more than 200 years and its beauty makes it the ideal wedding destination. All across Niagara and St. Catharines you’ll find places that capture the romance of this region. If you have your heart set on a winery wedding or dream of saying your vows in a historic church, you can find it here.
Niagara is also the perfect place to settle down in your first home together. You may feel eager about the idea of finding just the right home as you take this wonderful next step together. Perhaps you’ve been trying out mortgage calculators to help you prepare for homeownership.
As you crunch the numbers to make your house dreams a reality, the First-Time Home Buyer Incentive may be what you need to make it possible. Introduced last fall by the Government of Canada, this program is an excellent opportunity and could be the motivation you need as a couple to make the jump into buying your first home.
The First-Time Home Buyer Incentive aims to make homeownership more affordable by lowering your overall mortgage costs. The program offers a loan in the amount of 5% or 10% of the purchase price of the home, which is added to the down payment. While you are responsible for the down payment (at least 5%), this added amount reduces the overall amount of your mortgage loan. This difference is reflected in your monthly mortgage payments that are reduced as a result.
This borrowed amount is known as a shared equity mortgage because the government shares in the value of the property value. You will pay back the same percentage that you borrow within 25 years or when you sell your home. To clarify, if the government incentive is 5% and you sell 6 yrs down the road, you would pay back 5% of the new sale price, regardless of whether it goes up or down.
Does the First-Time Home Buyer Incentive really make a difference? Let’s look at an example.
Imagine you are looking to purchase your new home with a maximum purchase price of $440,000. You have your down payment of $40,000 (5%) and will have a mortgage loan for $416,000.
With the First-Time Home Buyer Incentive, you would qualify to borrow 10% of the home’s purchase price. This additional $44,000 would be added to the total down payment, or $84,000. This means your mortgage loan amount would be $50,032 lower: $416,000 without the incentive or $365,968 with the incentive. The effects of this would trickle down as your mortgage premium would lower: $9,968 compared to a premium of $16,000 without the incentive. Your mortgage payment would be $1,847 per month, an overall savings of $252.44 compared to $2,099 per month without this incentive.
You have the potential of saving over $3,000 in the first year and over $31,000 over the next 25 years!
As you plan the next stage of your life as a couple, the First-Time Home Buyer Incentive could be the help you need to have the wedding of your dreams and the house of your dreams, too!
To our lovely clients who are already homeowners, does your son or daughter have a wedding coming up this summer? Consider if the new couple should take advantage of these new mortgage rules and how you can help them do so.
Our REALTORS® would be happy to answer your questions about this incentive and how it can bring you closer to your dream of owning your first home!
Call our office at 905-687-9229 in St. Catharines, or 905-468-9229 in Niagara-on-the-Lake. Or send us a message on our contact page, HERE.