Thinking about buying your first home? Know someone who is? There are so many things to consider, being prepared is half the battle. Understanding what you want and how you are going to get there is an important first step.
Saving for a down payment and making sure you have a healthy credit score are two things you can do right now to start you on the road to home ownership. Below we listed a couple of great incentive programs for first time buyers that you might be able to use to your advantage.
Incentive programs for First Time buyers
Step number one is securing your down payment. There are several different incentive plans you should look into to see if you qualify.
First Home Savings Account (FHSA): A First Home Savings Account (FHSA) is a registered plan allowing you, as a prospective first-time home buyer, to save for your first home tax-free (up to certain limits).
The account has a $40,000 lifetime contribution limit and grows tax free. After 15-years the account can then be rolled into the RRSP without affecting RRSP contribution room. Effectively it gives anyone who qualifies for the FHSA an extra $40,000 to contribute to their RRSP.
First-Time Buyers' Tax Credit (HBTC) a program that allows you to withdraw funds from your Registered Retirement Savings Plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability. The HBP allows you to pay back the withdrawn funds within a 15-year period. For more about this please visit How To Participate in the Home Buyers' Plan (HBP)
What is a credit score and why does it matter?
A good credit score gives you access to more money at a lower interest rate. In Canada, you need a credit score of 680 or above to qualify for the best mortgage rates, although some mortgage providers will give you a mortgage with a credit score of 600-680 but at a higher interest rate.There are lots of different things you can start doing now to ensure that you have a healthy credit score for when you need it. There are also a few things you need to know that can damage your credit score that you can stay away from if you’re prepared. Please visit our blog to find out all the details.
It’s important to know what all your options are to help realize your dreams of being a homeowner. Please feel free to contact me in complete confidence to discuss all your options.
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