What is the First Time Homebuyer Incentive?.

The first-time homebuyer incentive program is a shared-equity mortgage with the Canadian government that helps qualified first-time buyers reduce their monthly mortgage payments to better afford a home!

The Incentive: This program allows you to obtain an incentive from the government to assist with your down payment, thereby lowering your overall mortgage amount and, in turn, your monthly mortgage costs.

• 5% or 10% for a first-time buyer’s purchase of a newly constructed home
• 5% for a first-time buyer’s purchase of a resale (existing) home
• 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home

Qualifying for the Incentive: This program is designed to assist first-time homebuyers, therefore you must:

• Have never purchased a home before
• Have not occupied a home that you, your current spouse or common-law partner owned in the last 4 years
• Have recently experienced a breakdown of marriage or common-law partnership

If you meet the above criteria, further qualifications are based on your income and status as follows:

• Your total qualifying income is no more than $120,000 ($150,000 for homes in Toronto, Vancouver, or Victoria)
• Your total borrowing is less than four times your qualifying income (four and a half times your income if you’re purchasing in Toronto, Vancouver or Victoria)
• You are a Canadian citizen, permanent resident or non-permanent resident authorized to work in Canada
• You meet the minimum down payment requirements

Additional Costs: With the incentive, there are a few additional costs to be aware of such as additional legal fees (your lawyer is closing two mortgages, the one on your behalf and that on the Government’s behalf), appraisal fees to determine the repayment value of your home when it comes due, plus other potential fees such as refinancing or switching costs if you decide to move or update your mortgage.

Repayment Process: When it comes to repayment of the incentive, the homebuyer is required to pay back after 25 years or when the property is sold, whichever comes first. They are also able to repay anytime prior to this without penalty. The repayment is based on fair market value at the time of repayment and you would pay back what you received. For instance, if you received a 5% incentive, you would repay 5% of the current home value at the time of repayment.

Keep in mind, if you choose to port your mortgage or go through a separation during the term and want to buy out your co-borrower, you will have to repay the incentive sooner.

Click here to learn more about the First Time Homebuyer Incentive and contact a DLC Mortgage Expert today to get started on your homebuying journey!

Written by DLC Teams

What is an Uninsurable Mortgage?.

When it comes to mortgages, insurance is necessary to protect the lender on these types of loans, which deal in large sums of money. There are three different tiers relating to insurance, which all have different minimum down payment amounts and varying premium insurance fees.

1. Insured mortgages typically have a less than 20% down payment and are insured with mortgage default insurance through one of Canada’s mortgage insurers: CMHC, Sagen or Canada Guaranty. In these cases, the premium is based on a percentage of the loan amount, which is added to the mortgage and paid monthly.
2. Insurable mortgages typically have a 20% or higher down payment and do not require mortgage insurance, though they can qualify for it. In these cases, the homeowner wouldn’t have to pay an insurance premium, but the lender can if they choose to.
3. Uninsurable mortgages do not meet mortgage insurer requirements; some examples of these types of mortgages can include: refinances, mortgages with an amortization longer than 25-years or mortgage files where the real estate is more than $1M in value and/or purchase price. No insurance premium required.

While insured and insurable mortgages are more common and typically more cost-effective when it comes to lending money, therefore clients who opt for these mortgages often get better rates.

When it comes to an uninsurable mortgage, this means that the lender is providing their own funds to the client without the protection of insurance, and have to commit to the loan for the entire term. Due to this, uninsurable mortgages tend to have higher interest rates as they are a higher risk loan.

Typically, uninsurable mortgages require a minimum of 20% down on the loan and are available for up to 30-year amortization. It is also important to note that an uninsurable mortgage will often require a higher Gross Debt Service (GDS) and Total Debt Service (TDS) ratio to indicate that you can carry the loan without high risk.

While some lenders may offer more flexibility when it come to an uninsurable mortgage, if you are looking to refinance or change to a longer amortization period, it is best to discuss with your DLC mortgage expert before making any changes to your mortgage.

Written by DLC Teams

Selling Your Home in the Spring.

Are you looking to sell your home? We have a few tips to help you make the most of the spring season!

1. Hire an Experienced Realtor: Before preparing your home for the Spring market, you will want to hire an experienced realtor! A good realtor will serve as your guide through the entire sales process, helping you get your home ready for listing, showing potential buyers and finalizing the eventual sale. This is even more important given the changing landscape in relation to additional safety protocols with viewings and even virtual viewing options. Now, more than ever, the expertise of a realtor will help you navigate the sales process.
2. Prioritize Repairs and Improvements: Before listing your home, it is important to go through room-by-room and address any issues such as chipped paint, small holes in the wall, broken fixtures, old appliances, etc. Correcting these minor issues will help your home truly shine when buyers walk through.
3. Clean and Stage Your Home: Now that you have made the necessary minor repairs, you can start staging your home! Start with the exterior of your home and ensure you tidy up the yard, remove any junk and wash your windows! When it comes to the interior of your home, you will want to declutter and do a deep clean (a professional cleaning service can come in handy for this!). Once your home is decluttered and clean, your real estate agent can help you stage it so that it appears spacious and inviting.
4. Consider a Pre-Listing Inspection: Once you are ready to list your home, it can be a good idea to consider a pre-listing inspection. The inspector would conduct a complete visual inspection of all interior and exterior elements (including HVAC systems, wiring, ceiling, chimneys, gutters, etc.), which would help put prospective buyers at ease.
5. Organize The Paperwork: There is a lot of paperwork when it comes to selling your home. Having all of these documents organized and together for potential buyers will help to speed up the process and allow them to address any questions before the deal is finalized. Permits, renovation or repair receipts, warranties, rental agreements and copies of your utility bills are all good records for potential buyers.

Whether you are looking to buy or sell, it is important to work with a trusted real estate and Dominion Lending Centres mortgage expert to ensure the best outcome for you and your family!

Written by DLC Teams