Special Programs for First Time Home Buyers

Buy Your Home With 5% Down

Program For First Time Home Buyers

At Mortgage For Less we have assisted many first-time home buyers purchase their first home with only 5% down. Since the 5% down program was started by the Canadian Mortgage and Housing Corporation it has given people right across Canada the opportunity to own their own home – and it was changed recently to allow anybody to buy with 5% down so you no longer even have to be a first-time home buyer to take advantage (Canada Mortgage and Housing Corporation insurance fees of 2.75% of the mortgage amount will be added to the home mortgage in this case).

Using Your RRSPs for Down Payment of a Home

The Canadian government allows a tax-free withdrawal from a Registered Retirement Savings Plan (RRSP) that can be used as a down payment for first time home buyers, and then repaid over 15 years. It's actually a great way to buy your first home.
There are specific guidelines for the buyer(s) to follow to qualify for this program:

  • Buyers must meet Canada Mortgage and Housing Corporation (CMHC) First-Home Buyers' Program definitions
  • Each buyer may use up to $25,000 from their RRSP for down payment - that's $50,000 per couple
  • The new property must be located in Canada and be the buyer's principal residence
  • A T1036 application is required to be completed and taken to the institution that holds the buyer's RRSP. This Program may be used with the CMHC's First-Home Buyer's Program (5% down payment). The RRSP must be established for at least 90 days before closing the housing transaction

A mortgage specialist from Mortgage for Less can help you figure out if your mortgage loan qualifies for this program and assist you with the process.

The Cash Back Mortgage / Zero Down payment Mortgage

With this option, you get up to 5% of the mortgage amount back on the closing date of your transaction. Since the lender provides 95% financing and you get the remaining 5% in cash back, you effectively only need your closing costs. This is practically like buying your home with NO MONEY DOWN.

If you take advantage of this type of offer, you can expect your mortgage rate to be higher—so a cash back or zero down payment mortgage is not always the best option. But in many cases the little bit extra that you pay per month on your home mortgage payments is very manageable — and gets you in your home sooner!

ONTARIO Land Transfer Tax Refund for First-Time Home Buyers

The Land Transfer Tax applies to all transfers of land in Ontario, but first-time home buyers may be eligible for a refund of all or part of the tax.

How much is the Refund?

The maximum amount of the refund is $2,000. If the refund is claimed at time of registration, it may offset the land transfer tax ordinarily payable. No interest is paid on this refund.

Who Qualifies?

To claim a refund, you:

  • Must be at least 18 years of age;
  • Must occupy the home as your principal residence within 9 months of after the date of transfer; and
  • Cannot have owned a home, or an interest in a home, anywhere in the world.

First-Time Home Buyers’ Tax Credit – Up to $750

This tax credit exists to assist first-time home buyers with the closing costs related to purchasing their first home.

With this credit, you can receive up to 15% of your closing costs (to a maximum of $750) as a tax credit.

An individual will be considered a first-time home buyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the calendar year of the home purchase or in any of the four preceding calendar years.

For more information contact Service Canada at 1-800-662-6232
or visit www.fin.gc.ca

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