Man giving keys to the new home owner

 

Are You Ready to Make a Smart Move?

Have you ever pondered the best moment to make your ambition of becoming a homeowner a reality? The idea of entering the property market may be both exciting and intimidating for first-time homebuyers. Enrich Mortgage Group is aware that going through this important life change is a major move, but it’s also a smart long-term choice.

It is important to lay a strong foundation for your financial future in addition to securing a place to live. Your goal of becoming a homeowner is more attainable than you may believe thanks to our knowledge of mortgage qualification and dedication to helping you at every turn.

How do first-time homebuyers qualify for mortgages?

Have you ever wondered about the financial considerations that come into play when pursuing your dream of homeownership? Official guidelines recommend that your monthly housing expenses ideally should not surpass 39% of your gross monthly income, encompassing mortgage payments, property taxes, and heating costs. Moreover, your total monthly debt load, inclusive of your mortgage and other financial obligations such as loans or credit card payments, should not exceed 44% of your gross monthly income. Moreover, there’s a glimmer of flexibility if you’ve managed to save up a 20% down payment for your first home – some lenders may offer more lenient terms within these debt ratios. To ascertain your eligibility for a mortgage to purchase your dream home, make use of our user-friendly mortgage calculator. Let’s navigate this financial journey together and transform your homeownership aspirations into a reality.

Saving for Your Home

Turning your dream of homeownership into a reality begins with one essential step – saving for your down payment. For first-time homebuyers, this can be both an exciting and a challenging journey. The good news is that you can start taking meaningful steps today to make those dreams a tangible reality.

When it comes to down payment savings, a critical aspect is budgeting. By incorporating a dedicated savings plan into your monthly budget, you’re taking the first stride toward securing your future home. In Canada, you can purchase a house with a minimum down payment of just 5%, which makes homeownership more accessible than you might think.

However, if you haven’t yet reached your down payment savings goal, there’s no need to worry. Enrich Mortgage Group is here to assist you on this journey. Our advisors can explore a range of options tailored to your unique financial situation, ensuring that you’re on the right path toward becoming a homeowner.

Some Account Types to Help You Save for Your Down Payment

When it comes to building your down payment savings, there are a variety of account types designed to cater to your unique financial goals. These accounts not only help you accumulate the funds you need but also offer tax advantages to make your savings journey more efficient.

  • Tax-Free Savings Account (TFSA): Consider opening a Tax-Free Savings Account, or TFSA, which allows you to save or invest your money without worrying about taxes eating into your gains. The beauty of a TFSA is that you can use it to accumulate funds for your down payment, and when the time comes to make that purchase, you can withdraw your savings entirely tax-free. It’s a flexible and tax-efficient way to save toward your homeownership goals.
  • Registered Retirement Savings Plan (RRSP): While primarily designed for retirement savings, an RRSP can also serve as a valuable tool to help you buy your first home. Through the Homebuyers’ Plan (HBP), eligible individuals can withdraw up to $35,000 from their RRSP to put towards their down payment. The HBP offers the advantage of interest-free repayments over 15 years, making it an attractive option for those planning to purchase a home.
  • The First Home Savings Account (FHSA): Specifically tailored for aspiring homeowners, the First Home Savings Account (FHSA) is an excellent choice for first-time buyers. With the FHSA, eligible individuals can save up to $40,000 entirely tax-free. What’s more, it comes with an annual contribution limit of $8,000, ensuring you can make substantial progress toward your down payment savings goal each year.

Homebuying Programs and Incentives

The Government of Canada recognizes the importance of making this dream achievable for first-time homebuyers and offers a range of government homebuyer programs and incentives designed to pave the way toward successful homeownership.

  1. First-Time Homebuyer Incentive: Provides eligible individuals with the opportunity to receive either 5% or 10% of their home’s purchase price as a down payment incentive. This assistance can be a game-changer for those striving to save for that crucial down payment.
  2. Homebuyers’ Plan (HBP): Is allowing you to withdraw up to $35,000 from your Registered Retirement Savings Plan (RRSP) tax-free. This program serves as a financial bridge to help you step into your first home with more ease and financial flexibility.
  3. Homebuyers’ Amount: This program offers eligible first-time homebuyers a non-refundable tax credit of up to $1,500, providing additional financial relief.
  4. GST/HST New Housing Rebates: Can potentially grant you a rebate on some of the taxes associated with your home purchase. To fully understand these government homebuyer programs and incentives and to determine your eligibility, we encourage you to get in touch with us at Enrich Mortgage Group.

Essential Steps to Find Your Dream Home

Are you prepared to start your search for the ideal residence? Here’s how to get your search going:

  • Get Preapproved for Your Home: One of the first steps in your homebuying journey should be getting preapproved for a mortgage. At Enrich Mortgage Group, we offer a pre-approval process designed to give you a clear understanding of your budget. Knowing what you can afford is the cornerstone of a successful home search. Contact us, and we’ll guide you through how to prepare for a mortgage and assist you in selecting the right one tailored to your needs.
  • Finding Your Home: The quest for your dream home begins with research. Explore various websites, online resources, and mobile apps to streamline your home search. These tools empower you to filter properties based on your preferences, from location to features. However, remember that realtors are invaluable allies in your journey. They offer expertise in searching for homes, negotiating deals, navigating paperwork, and providing insights into the local real estate market. What’s more, when you buy a home, it’s typically the seller who covers the realtor’s fees, making their assistance a valuable asset.

Upfront Homebuying Costs

  • Beyond the Mortgage: While securing a mortgage is a significant aspect of your home purchase, it’s essential to factor in upfront costs. These one-time expenses include home inspection fees to ensure your prospective home is in good condition, legal fees for the necessary documentation, property tax adjustments, and title insurance for peace of mind. These costs are an integral part of the homebuying process, and it’s advisable to set aside funds specifically for them.