But what does this mean for you?
We’ve talked to experts about the First Time Home Buyer Incentive program. If you’re a first time home buyer, read on to learn more.
Facts About the Incentive
- It’s called the First-Time Home Buyer Incentive (FTHBI).
- Households must have income under $120,000 to qualify. A guarantor’s income would apply toward this amount.
- Applicants must be a first time home buyer.
- CMHC is the Loan Administrator and will loan you 5-10% of the house value for your down payment.
- If the house is brand new, you can borrow up to 10% for your down payment.
Let’s Hear the Opinions of 2 Edmonton Experts:
Finance Expert: Lorne Rackel
General Manager Jayman Financial and a Broker of Record.
“This incentive will help some customers,” says Rackel, “because it reduces monthly costs. But it also reduces your borrowing power.”
A few things worry him:
- Household income must be less than $120,000.
- Total mortgage amount can’t exceed 4x income.
Award-Winning Sales Expert: Muriel McKay
Area Sales Manager, Crimson Cove Homes
Muriel won the Platinum Sales Volume Award at this year’s CHBA Awards of Excellence in Housing Awards and has been selling new homes in Edmonton for 20 years. Many of her clients are first time home buyers.
Muriel understands that for some new home buyers, the savings advantage may be clear cut. For anyone who is interested, she offers important advice: do your homework to understand the potential tax implications.
“Everyone’s dream is to be a homeowner,” says McKay.
McKay counsels new home buyers to save money for a down payment, rather than more borrowing, and more debt. Her advice:
- Pay off your credit cards
- Pay off your debt
- Save for your own down payment
This way, you aren’t relying on the government. “The rules can change with the stroke of a pen,” says McKay.
Crimson Cove Homes offer clients to build over a longer time, giving you a chance to save more money for your downpayment. They are many options and incentives for First Time Home Buyers, make sure to ask your Builder and Mortgage Broker so you have all the purchasing advantages.
Do your own research.
- Ask builders about incentives.
- If you do decide to apply for the FTHBI, make sure you fully understand how it might affect your income tax bill. First time home buyers have specific tax advantages, but the last thing you want is surprises on your income tax each year in April.
- Everyone’s financial situation is different: do your own homework.
This post is not intended to provide tax, legal or financial advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or financial advice. You should consult your own tax, legal and financial advisors before engaging in any transaction.
A version of this content was originally published on April 9, 2019.