In Town Realty

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                                FIRST TIME HOME BUYING - The Process Made Simple

The process of buying your fist home can be an overwhelming and intimidating experience.  Use this section of the website as a simple, user-friendly, informative resource for getting the process started.

This is an excellent time to purchase your first home.  The balanced real estate market we are currently experiencing means first-time homebuyers have a large inventory from which to select.  An even bigger advantage for buyers is the lower pricing!

Before you select a Realtor®, to assist you in the purchase of your first home, be sure you are working with someone you can trust with this important decision. 

                               Why its a Great Time to get into the Vancouver Market...

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                                                   Government Incentives

If the low interest rates and "properties on sale" weren't enough to get renters thinking about buying their first home the Government has stepped up to the plate and taken things even further.  The Federal Budget 2009, passed on February 3, 2009 offers a $7.8 billion package to homebuyers and renovators which include the following initiatives.

Home Renovation Tax Credit (HRTC): This temporary program provides an income tax credit on eligible home renovation expenses for work performed or goods bought after January 27, 2009 and before February 1, 2010. Homeowners can claim a tax credit for 15 per cent of renovation expenses between $1,000 and $10,000 for a maximum credit of $1,350. Be warned and become educated about this credit as there is no tax credit for less than 1,000. New additions, decks, carpeting, floorings, heating systems and landscaping qualify.  Furniture, appliances, tools and maintenance contracts do not qualify.

First-Time Home Buyers' Tax Credit: Provides up to $750 in tax relief to eligible first-time home buyers for costs associated with buying their first home, including legal fees and land transfer taxes.

EcoENERGY Retrofit program: Provides home and property owners grants of up to $5,000 to offset the costs of making energy-efficiency improvements.

Homebuyers' Plan: This is an increase to the RRSP withdrawal limit to $25,000 from $20,000 for eligible homebuyers. The plan, first introduced in 1992, has not had a withdrawal limit increase. Eligible couples can now withdraw up to $50,000. The Board estimates indicate that a couple buying a townhome in Metro Vancouver with a benchmark price of $423,338 will save $7,448 on their mortgage (at a five per cent rate amortized over 25 years) as a result of being able to use an additional $10,000 of their RRSPs.

Property Purchase Tax: When buying real estate in British Columbia, the government imposes a Property Purchase Tax based on the greater of the purchase price or the fair market value of the property. The tax is calculated at 1% of the first $200,000 and 2% of the balance of the value/purchase price.

Property Purchase Tax Exemption: You may qualify for a tax exemption if you, and the property you are purchasing, meet the following guidelines:

• Your down payment can not exceed 30% of the purchase price
• The maximum purchase price to qualify for the exemption in Vancouver is $425,000. Buyers of homes priced up to $450,000 can claim a proportional exemption.
• You may never have previously owned an interest in your principal residence (anywhere in the world).
• You must be a Canadian Citizen or Landed Immigrant and have been a resident of British Columbia for at least 12 consecutive months immediately prior to the purchase.
• The purchaser must occupy the property as their principal residence within 92 days of completion.
• Under certain circumstances, the purchase of raw land or a building lot may qualify.
• Other conditions apply.

Just as you were asking yourself the question, "how low can it go?," the Bank of Canada has once again slashed its key interest rate to bring it down to the lowest rate in its HISTORY to only .5 Per cent. Economists may have been predicting this further cut as the federal government continues to try to stimulate the economy and encourage future home owners to in fact BORROW and BUY.

So what now? It seems unlikely that interest rates will continue to fall much more.  The Bank of Canada is in fact predicting possible GROWTH in the 1st and 2nd Quarters.  What goes down must go up... so how much longer should you wait?.  Get into your bank, go see a good mortgage broker and get pre-approved.  In most cases you are Guaranteed the rate available on the date that you went (for a limited amount of days).

My expertise lays in the field of Purchasing and Selling Real Estate not in explaining or predicting Interest Rates.  For that reason I had a Local Mortgage Broker named Kolbi Turner put together a section on this website explaining the difference between working with a Bank versus a Mortgage Broker.

                                                Why Use a Mortgage Broker?

There are generally two ways to get a mortgage in Canada: From a bank, or from a licensed mortgage professional.

While a bank only offers the products from their particular institution, licensed mortgage professionals send millions of dollars in mortgage business each year to Canada’s largest banks, credit unions, and trust companies … offering their clients more choice, and access to hundreds of mortgage products!

As a result, clients benefit from the trust, confidence, and security of knowing they are getting the best mortgage for their needs.

Mortgage professionals work for you, and not the banks; therefore, they work in your best interest. From the first consultation to the signing of your mortgage, their services are free. A fee is charged only for the most challenging credit solutions, and it’s especially under those circumstances that a mortgage professional can do for you what your bank cannot.

Whether you’re purchasing a home for the first time, taking out equity from your home for investment or pleasure, or your current mortgage is simply up for renewal, it’s important that you are making an educated buying decision with professional unbiased advice. 

Kolbi Turner, Mortgage Broker

KTURNER@DOMINIONLENDING.CA

Dominion Lending Centres