Tag Archives: young buyers

How couples can save for a downpayment and stop arguing about money

According to a poll by the Bank of Montreal, 68 percent of Canadian couples surveyed cited fighting over money as a top reason for divorce, ahead of infidelity. Buying a home together only raises the stakes — bank accounts are merged, couples are collectively preparing for the biggest purchase of their lives and are budgeting together to chip away at a downpayment.

Octavia Ramirez is the founder of Paper & Coin — a financial coaching company that helps Millennials reach their personal finance goals. “Money can be a huge stressor in relationships. So why not get ahead of the problem?” she says.

Photo: Paper and Coin 

The finance pro is uniquely qualified to help couples. Since getting married, Ramirez has never once fought about money with her husband. “Obviously, I enjoy finances but it’s taken years of practice to get here,” she tells Livabl.

It all comes down to communication and understanding your partner’s unique worldview — especially when it comes to money. Dr. Katelyn Gomes (Ph.D., C.Psych), a clinical psychologist with CBT Associates, echoes this: “We each have unique personal histories that define our values, rules, dislikes and assumptions for living in and viewing the world — including how we spend money, save money, even what’s important in the home you purchase.”

Octavia Ramirez and Dr. Katelyn Gomes spill their tips for communicating about finances and, in turn, making your partnership even stronger.

Photo: James Bombales

1. Work together as a team by joining your accounts

“I often see couples not working together as a team by splitting their expenses. This divides your efforts and can interfere with what you’re trying to accomplish,” Ramirez explains.

When it comes to buying a home, Ramirez makes a case for joining your bank accounts, “When my husband and I get paid, it all goes into the same checking account and we move the money accordingly. We don’t treat it as my money, your money. Consider that both of your incomes together are the grand total.”

When couples put their savings into separate accounts, they also diminish their returns. “Splitting your accounts is a democratic way of doing things, but you won’t get as much bang for your buck that way,” she says.

Ultimately, if you’re in a serious committed relationship, be in a serious committed relationship. “If you divide things based on your separate incomes, it gives the person who makes more a leg-up versus feeling like you’re equally respected in the relationship,” says Ramirez.

Ultimately, you will both be living in the house together. If one person makes considerably less, going 50/50 can potentially lead to selling yourself short — and building resentment long-term.

Photo: Paper and Coin

2. Agree on your collective goals, then make a transparent budget

Ramirez often hears her clients explain that they have budgets — in their head. “It’s important to have a shared document that communicates your budget and spending at a glance.”

Before putting numbers into a Google spreadsheet, agree on your short-term and long-term financial goals with your partner. Working towards homeownership? Start by determining the cost of the house you want to buy, then work backwards to see how much you will need to save each year to make it happen.

“Once you know how much you’ll have to save in the year ahead, go back month-by-month and see what areas of your budget can be cut or if you can increase your income to reach that goal,” explains Ramirez.

Even if it means passing on your yearly vacation and doing a staycation, instead.

Octavia and Will Ramirez. Photo: Paper and Coin

3. Have regular budget meetings with your partner

Once you’ve set your budget and are tracking your expenses and spending, set monthly or bi-monthly meetings to stay on track.

“Getting a downpayment together is a huge accomplishment. It’s a long-term process and there are occasionally going to be slip-ups in your savings efforts. It’s important to come back together regularly to remind yourself of your ‘why’. Maybe you didn’t reach your goal one month. Don’t dwell on it for too long, and instead decide together to get back on the saddle,” says Ramirez.

Dr. Katelyn Gomes explains, “We have this tendency to incorporate comments from our partners using faulty or unhelpful interpretations. These are known as cognitive distortion and it includes things like mindreading, jumping to conclusions, catastrophizing or thinking of the worst-case scenario. When we think our partners opinion, wants or needs don’t align with our lens it can lead to difficulties in communication, clashes or arguments.”

When you keep the lines of communication open over your spending habits, it creates an opportunity to have the necessary dialogue to avoid miscommunications or jumping to conclusions.

“Whether it’s contentious or not, just showing up to have that conversation is really important to keep couples on the same page,” explains Ramirez.

Photo: Paper and Coin

4. Save for an emergency fund

To avoid major money stress down the line, Ramirez recommends having an emergency fund in place: “Before you buy a house, prioritize saving three to six months of expenses in advance. If you break up or someone loses a job, you won’t risk going into extreme debt while you figure out your next move.”

5. Stay in the loop, even if you aren’t handling the finances

If you’re the one to handle the finances, Ramirez recommends letting your partner in on exactly what’s going on — whether it’s your insurance policy, the status of the car payments, how much interest you’re paying on the mortgage, or how much credit card debt each person has brought into the relationship.

“Because I enjoy finances, there’s a temptation to not keep my husband in the loop,” says Ramirez. “But even when I handle everything, I always debrief him after. He knows the passwords for the bank accounts and where things go, so he can take over at any point. Having everything on the table encourages you to trust each other.”

Source: Livabl.com –  

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Renting Versus Buying: A Real Estate Expert Breaks It Down for Us

The renting versus buying dilemma is one my friends have started to face since they’ve begun leaving Manhattan and escaping to the suburbs (I’m still not there yet, but when I think about how much money I “throw away” each year on rent, it’s actually cringe-worthy). But, maybe it’s true when they say the grass is always greener. Buying doesn’t come without its own set of problems, considering both sets of my friends who recently purchased homes faced movers damaging their patio, gas leaks, and even a broken washing machine within the first week. (They’ve confided in me that their bank accounts are still recovering.)

Since we’re no experts on the topics, we decided to tap Scott McGillivray, a real estate/renovation expert and TV host, to get his professional take. “Neither renting or buying is intrinsically right or wrong,” he says. “It basically comes down to your goals and your lifestyle.” That being said, he encourages getting into the real estate market once you feel financially prepared to do so. And what if you’re worried about going all in? McGillivray suggests trying a practice mortgage in which for one year while you’re renting, you put aside the amount you’d have to pay as a homeowner (mortgage, property tax, potential repairs). This gives you a realistic idea of how your lifestyle and budget will be affected if you buy.

“If you can manage, go for it,” the expert says. “And the bonus is that at the end you’ll have some extra cash for a down payment.” Since renting versus buying is no small debate, we asked McGillivray to break down all the pros and cons for each. Keep reading to get the full scoop.

 

 

Source: MyDomaine.com – by 

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12 most affordable cities for millennial first-time homebuyers

Affordability stands in the way for millennials as one of the main barriers to homeownership.

But not all housing markets are created equal, and many cities offer this generation plenty of options within a price range they can afford.

“Millennials who dream of owning a home will have better luck if they move inland to places like St. Louis, Columbus and Pittsburgh,” Redfin chief economist Daryl Fairweather said in a press release. “These cities used to have economies that relied heavily on manufacturing, and during the recession a lot of young people moved away in search of jobs.”

With home price growth currently plateauing, the time for millennial buyers to strike could be now before that changes.

“However, now these cities have more diverse economies based on education, healthcare and technology, and there are open jobs with salaries that are high relative to cost of living. But millennials may want to move as quickly as possible because even in most inland cities the share of homes affordable to the typical millennial is shrinking as housing prices go up,” Fairweather said.

From just below the Mason-Dixon Line to the gateway to the West, here’s a look at the 12 housing markets with the highest percentage of homes affordable to millennial purchasers with median incomes.

Redfin calculated the share of homes in each housing market that were affordable during 2018 to households making the median income for millennials in that metro area, assuming a 20% down payment, an interest rate of 4.64% and a monthly mortgage payment no more than 30% of gross income.

 

12. Baltimore, Md.

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Median list price: $308,595
Median millennial salary: $85,562
Homes affordable to millennials: 81.3%

11. Raleigh, N.C.

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Median list price: $298,081
Median millennial salary: $76,729
Homes affordable to millennials: 81.4%

 

10. Oklahoma City, Okla.

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Median list price: $198,000
Median millennial salary: $60,462
Homes affordable to millennials: 82.8%

9. Indianapolis, Ind.

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Median list price: $190,000
Median millennial salary: $62,054
Homes affordable to millennials: 83.5%

 

8. Cleveland, Ohio

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Median list price: $164,900
Median millennial salary: $56,151
Homes affordable to millennials: 84%

7. Minneapolis, Minn.

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Median list price: $284,900
Median millennial salary: $83,933
Homes affordable to millennials: 85.1%

 

6. Kansas City, Mo.

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Median list price: $225,000
Median millennial salary: $71,313
Homes affordable to millennials: 85.2%

5. Hartford, Conn.

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Median list price: $249,900
Median millennial salary: $76,235
Homes affordable to millennials: 85.7%

 

4. Cincinnati, Ohio

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Median list price: $199,900
Median millennial salary: $68,511
Homes affordable to millennials: 85.9%

3. Columbus, Ohio

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Median list price: $215,500
Median millennial salary: $71,181
Homes affordable to millennials: 87.1%

 

2. Pittsburgh, Pa.

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Median list price: $179,900
Median millennial salary: $70,169
Homes affordable to millennials: 87.5%

1. St. Louis, Mo.

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Median list price: $189,900
Median millennial salary: $68,805
Homes affordable to millennials: 88.1%
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Source; National Mortgage News – Paul Centopani February 12 2019
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Rental market braces for influx of tenants

 

Rising interest and strict mortgage qualification resulted in fewer Canadians seeking homeownership than rental accommodations last year, and 2019 will bring more of the same.

“It’s going to continue,” said Marcus & Millichap’s Vice President and Broker of Record Mark Paterson. “People will continue renting rather than dealing with residential mortgages. The rental market right now can barely keep up with the vacancy rate in Toronto, for example, being around 1%.”

Competition for rentals will be even fiercer this year in urban centres and that will push rents upward, creating a spillover effect into satellite markets.

“The rental market will see an increase of 8-10% because of demand,” said Paterson. “Unfortunately for people trying to find affordable housing, they’re looking elsewhere in secondary markets. They’re priced out of city centres, and that means the talent pool for jobs will end up in secondary markets.”

The Marcus & Millichap’s 2019 Multifamily Investment Forecast Report notes that apartment projects have become more financially viable, as evidenced by 60,000 units in the pipeline countrywide. However, that’s little relief given how few vacancies there are.

“The number of occupied units grew by 50,000 last year, outpacing supply growth nationally just as 37,000 new apartments came online,” read the report. “The national vacancy rate declined to 2.4%, the lowest reading since 2002. A shortage of construction workers, a long approval process and higher development and financing costs are slowing the delivery schedule this year, curbing completions by roughly 2,000 units from last year’s total.”

“Historically, Canada has been heavily reliant on condominium owners to supply the rental market, filling the void that purpose-built rentals have not been able to close. Prices have climbed substantially for condo investors, though, slowing this practice… and pushing more residents in search of housing to the apartment market.”

While secondary markets will enjoy the dregs of Toronto’s renter pool, the city will remain popular with renters. As the city has matured into a leading North American tech hub, the vacancy rate is under even more pressure.

“Microsoft, Intel, Uber and other companies have plans to increase operations in the city and bring on new workers,” continued the report. “Amid its solid reputation as a top innovator in tech and a mature ecosystem that supports the industry, the GTA will attract young professionals in greater numbers this year. Many new residents choose to rent, not only due to barriers to homeownership, but for greater mobility and to be near local employers, restaurants and nightlife.”

Source: Mortgage Broker News – by Neil Sharma 31 Jan 2019

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Can a single person afford to buy a place in Toronto?

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On a recent evening, I was scrolling through some images of George Nelson wall sconces on my phone. (If you’re about to Google it, I ask that you not judge my extravagant taste).

I was fantasizing about how great they’d look beside my bed — but oh yeah, that would require drilling into the wall. And as a renter, I have to consider whether they’d be practical in the layout of my next place, let alone whether I’d even be allowed to drill there.

If I owned a condo I wouldn’t have to think about stuff like that.

Truth be told, I’m getting a little impatient. I want the same privileges homeowners enjoy. No surprise, then, that I woke up on my birthday last year wondering: am I really going to deal with landlords and roommates for the rest of my life?

Sure, my apartment has its charms — built-in cabinetry, surprisingly spacious bedrooms, proximity to both a pizza joint and a wine store — but every day on my way to work, I pass a brand new condo building with large wrap-around concrete balconies; that’s something my turn-of-the-century apartment building lacks. I feel a twinge of envy.

There’s a ton of pressure in Toronto’s housing market (where I hope to buy) to get in — and get in quickly. Why? Because housing prices have been going up every year.

Even housing experts are encouraging people not to wait.

“In the end, the history shows that it is more likely that the market will go up in the future. if you want to purchase you might as well do it as soon as possible,” Louis Phillipe-Menard, director of mortgage products at National Bank, told me when I called him up for his professional opinion.

The thing is, I’m single.

Based on the metrics that lenders consider, it’s less likely that a household with only one income would be able to service a mortgage for a Toronto property.

Mortgage lenders will generally only lend customers a mortgage amount that’s worth five times their annual salary (the maximum amount Canadian banks are allowed to loan you).

According to the 2016 census, the median total household income in Toronto is around $65,829. In December, the Toronto Real Estate Board reported that the median sale price of a condo was $594,381 up 11.4% from the year before. (Forget buying a house in the city — the average price for a detached home was $1.15 million.)

On a salary of that size, it’s unlikely you’ll qualify for a mortgage — unless you’ve got $100,000 saved up as a down payment.

And that’s just the sale price. There are lots of other factors that could make or break your dreams of becoming a condo owner.

The metrics lenders look at to decide if you’re loan-worthy include the gross debt service ratio, which measures the percentage of your pre-tax income needed to pay your housing costs on top of the mortgage (like taxes, insurance, utilities, and condo fees). They also look at the total debt service ratio, which measures how much of your income will go to covering existing debts.

So, even if you make an above-average salary, if you have large debts, you may not be able to get a mortgage.

Those are a lot of expenses for one person to carry. Obviously, two incomes in such a scenario are better than one. At this point, I’m thinking that my chances for homeownership are slim.

But despite those mind-boggling expenses, I keep finding people who insist that there are singletons out there living my dream.

Megan Sheppard, a real estate agent in Toronto whose clientele includes lots of single people, warns that every year you stay out of the market, you miss out on your home’s appreciation.

“If you look at the price of what you’re paying [for rent] and the [price and] appreciation of a condo, [the difference is] like a tip at a restaurant for a good meal,” says Sheppard.

Assuming the value of a condo worth $450,000 goes up in value by 6% each year, that’s an appreciation of $27,000 a year. Or, as Sheppard puts it: “Every year you rent, you’re losing the $27,000.”

Of course, past performance doesn’t equal future returns. And now buying any property has become a lot harder after the federal government imposed new rules on mortgage lenders last year. The new “stress test rule,” brought to you by the Office of the Superintendent of Financial Institution, went into effect in January 2018.

The new rule means that anyone who wants a mortgage must be able to show they can afford payments that are two percentage points higher than their quoted rate, or their bank’s five-year average rate — whichever one is higher.

Right now, you can put as little as 5% down when buying a home. Doing that also means you’ll have to buy insurance from the Canada Mortgage and Housing Corp., which can add tens of thousands of dollars annually in payments to the total cost of your mortgage.

Ironically, you’re more likely to get a lower mortgage rate from your lender when you put 5% down. Why? Because your mortgage is insured — by the federal government. Meaning, the government’s left holding the bag if you default, not the bank.

Even though it’s impossible to say for sure where the market is headed, both Phillipe-Menard and Sheppard predict that for Toronto home prices, the only way is up. “Everyone wants to be here,” says Sheppard. And unless that changes, you can bet that Toronto prices are going to stay expensive.

But buying a place leads to expenses that renting doesn’t — things like interest payments, lawyer’s fees, home insurance premiums, maintenance and renovation costs, and last but not least, property taxes.

When you’re on your own, you’re on the hook for those things. Your mortgage lender doesn’t care if you lose your job.

That’s one of my biggest fears, so to assuage them, I set out to talk to another single woman who bought her own place. Thirty-one-year-old Janelle (who requested her last name not be used) bought her first house in a rural town by herself a decade ago. She knew from a young age that being a homeowner was important to her. To meet her goal, she worked while attending high school and then later college.

By the time she graduated college, she had a down payment of 20% on a home that cost roughly $120,000.

Buying a house with a down payment smaller than that is unimaginable to her — and me too, frankly.

“It baffles me that you’re paying your mortgage for 25, 30 years. If you’re only paying 5% into it, that’s another $20-25,000 in interest at the end of your mortgage,” she says.

At the end of the day, she adds, it’s still more expensive to be a homeowner.

“As soon as you get into a mortgage, a bill always seems to creep up when you least expect it. ‘I just had $1,000 saved, but oh, I have to install in a new shower.’ Once you get into a house it’s not like the bills stop,” says Janelle.

There are a few other variables you need to factor in, as well.

One is that salary growth has remained flat for most of us and it looks like it’s going to stay that way. The other one is that the Bank of Canada’s key interest rate has been rising steadily over the past two years, meaning the cost of borrowing money is going up.

Of course, your circumstances may change for the better. For renters who are stuck on the idea of one day buying a home, Sheppard advises asking yourself the following questions:

  • How much you can you currently afford in rent?
  • Do you have the potential for your income to increase?
  • Is there anyone else who can do this with you (like a parent)?

Sometimes the smartest, safest, and the most responsible option is not buying, says Sheppard. “Housing is a necessity but owning your real estate is wealth and it’s a long-term investment,” says Sheppard.

Based on my circumstances, I’ve decided to continue renting while also putting away a few hundred dollars away each month. Right now it’s acting as an emergency savings account, but maybe one day I’ll take money out for a down payment. Maybe homeownership will happen for me one day.

At the very least, saving for a home will leave me with a nice pile of savings if I ever need it. Like if I want to get myself some fancy mid-century wall sconces.

Source; Lowestrates.ca – By: Alexandra Bosanac on January 11, 2019

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Down Payment Assistance Programs Across Canada

Canadian down payment assistance programs help first-time home buyersSo many young people want to build home equity and get out from under their landlord’s thumb.

But they can’t. They don’t have the down payment to qualify for a mortgage.

For many modest-income Canadians, saving up the 5 percent minimum down payment (or 20 percent if you want to avoid CMHC insurance) can take years—many, many years.

While some are able to rely on gifts from parents/family (39% of first-time buyers according to a 2018 Mortgage Professionals Canada study) or loans from family (25%), or RRSP withdrawals (38%) to make their down payment, those options aren’t available to everyone.

That’s where government down payment programs come in. Scattered across Canada, these little-publicized municipal and provincial programs are helping first-time home buyers fund their down payments and make the transition from renter to owner.

Since most people don’t know about them, their uptake is typically low. When the B.C. government launched its program in 2017, for example, it thought 42,000 residents would participate in the first three years. After nine months, only 1,400 had done so.

To some onlookers, giving buyers government money to buy a house may seem a bit too socialist, but municipalities have an interest in transitioning financially stable renters from apartments to houses. Among other reasons, it frees up rental units and grows their property tax base.

To help homebuyers find such assistance, the Spy has rounded up some of the more popular programs. What follows are grant or loan programs that provide a portion of the down payment to qualified borrowers. Note that this list isn’t exhaustive and that the status of these programs change regularly. Moreover, once quotas are reached many such programs end, so contact the source for the latest info.

 

Alberta

Program: PEAK Housing Initiatives (formerly PEAK Program)
Provider: Joint initiative between Trico Residential, the Government of Alberta Municipal Affairs, CMHC and Habitat for Humanity
Details: PEAK housing units are priced at market value and recipients must be able to qualify for and hold a mortgage. Once approved for the program, PEAK provides a second mortgage for either a partial or full down payment up to a maximum of 5 percent of the purchase price. PEAK has so far helped 111 individuals and families purchase a home of their own.
How to apply: http://www.peakinitiative.ca/

Program: Attainable Homes (specific to Calgary only)
Provider: The City of Calgary
Details: This program has been in place since 2009 and is geared towards moderate-income Calgarians. Successful applicants must be able to contribute $2,000 towards the downpayment of their home, and the Attainable Homes program contributes the rest.  If and when the homeowner sells the home, the growth in the home’s value is split between the homeowner and the program, with that money reinvested to assist other homebuyers. The longer the homeowner remains in the house, the more their share of the appreciation increases.
How to apply: https://attainyourhome.com/

 

British Columbia

The province of B.C. ended its Home Owner Mortgage and Equity Partnership on March 31, 2018. It has no widely available down payment assistance programs at this time.

 

Manitoba

Program: Rural Homeownership Program
Provider: Manitoba Housing
Details: This program is limited to those renting a home owned by Manitoba Housing in selected rural communities or those who would like to purchase a vacant home owned by Manitoba Housing. Applicants must have a maximum household income of $53,441 if they don’t have children, and $71,255 if there are children or dependents. The program has two components, a loan worth 10 percent of the purchase price, which is forgivable on a pro-rata basis over five years. Another 15 percent loan is forgivable after 15 years of continuous ownership and occupancy of the property.
How to apply: http://www.gov.mb.ca/housing/progs/homeownership.html

 

Saskatchewan

Program: 3% Down Payment Assistance Program
Provider: National Affordable Housing Corporation
Details: Provides Saskatchewan homebuyers with a 3 percent non-repayable down payment assistance grant towards the purchase of a home from one of the NAHC’s partner housing providers. Saskatchewan households with incomes less than $90,000 per year are eligible for financial support under this program.
How to apply: http://nahcorp.ca/assistance/nahc-3-down-payment-assistance-program/

Program: Mortgage Flexibilities Support Program
Provider: City of Saskatoon, CMHC and the Saskatchewan Housing Corporation
Details: This program is for designated projects in the city of Saskatoon and provides qualifying homebuyers with a 5 percent down payment grant for the purchase of a home. The household income limit must be less than $69,975 for one person and $74,640 for two people. Their maximum net worth must also be less than $25,000.
How to apply: https://www.saskatoon.ca/services-residents/housing-property/incentives-homebuyers

 

New Brunswick

Program: Home Ownership Program
Provider: Government of New Brunswick
Details: This program offers assistance in the form of a repayable loan worth up to 40 percent of the purchase price of an existing home, or a maximum of $75,000 for new builds. It’s available to those with household incomes below $40,000. Applicants must be first-time homebuyers or be living in a sub-standard housing unit; have been living in New Brunswick for at least one year prior to application; and have a good credit rating and meet all financial institution lending requirements for obtaining a first mortgage.
How to apply:http://www2.gnb.ca/content/gnb/en/services/services_renderer.8315.Home_Ownership_Program.html

 

Newfoundland & Labrador

Program: Home Purchase Program (HPP)
Provider: Government of Newfoundland and Labrador
Details: This program will remain open over 2018/19 until funding has been fully committed to up to 330 homebuyers. Grants of $3,000 are available to qualifying individuals and families to assist with the down payment of a new home valued up to $400,000 (including HST).
How to apply: http://www.nlhc.nf.ca/programs/programsHpp.html

 

Nova Scotia

Program: Down Payment Assistance Program
Provider:
 Housing Nova Scotia (Government of Nova Scotia)
Details: This is a pilot program to assist Nova Scotians with a household income of $75k or less. The program offers an interest-free loan of up to 5 percent, to a maximum purchase price of $280,000 in the Halifax Regional Municipality and $150,000 elsewhere in the province. The loans will range from $7,500-$14,000 and must be repaid in 10 years. More than 150 first-time buyers benefitted from the program in its first year, and it will remain open until March 31, 2019.
How to apply: https://housing.novascotia.ca/downpayment

 

Ontario

Housing programs in Ontario are administered by municipalities based on the premise that they know their community’s needs best. Below is a selection of just several first-time homeowner assistance programs from some key municipalities.

Barrie (Simcoe County)

Program: Homeownership Program
Details: This program offers 10 percent down payment assistance in the form of a forgivable loan.
There is presently a waiting list, but applicants are still encouraged to apply. A percentage of available funding is designated for applicants currently living in Social Housing or those who self-identify as Aboriginal households.
More details: http://www.simcoe.ca/dpt/sh/apply-for-the-homeownership-program

Hamilton

Program: Homeownership Down Payment Assistance Program
Details: This program provides support to low- and moderate-income residents who qualify for a mortgage with a maximum home price of $375,000. To qualify, applicants must have a maximum household income of $80,000,
More details: https://www.hamilton.ca/social-services/housing/homeownership-down-payment-assistance-program

Kitchener (Region of Waterloo)

Program: Affordable Home Ownership program
Details: This program provides individuals and families with a loan of up to five percent of the purchase price of a home (up to a value of $386,000). Applicants must currently renting in the Region of Waterloo, be able to qualify for a mortgage, and have a maximum household income of $90,500.
More details: https://www.regionofwaterloo.ca/en/living-here/funding-to-help-buy-a-home.aspx

 

Prince Edward Island

Program: Down Payment Assistance Program
Provider: Government of Prince Edward Island
Details: This program assists Prince Edward Islander’s with modest incomes by providing a repayable loan of up to five percent of the purchase price of a new or existing home to a maximum price of $11,250. The loan amount must go towards the down payment and not towards financing or other closing costs. The loan bears a fixed interest rate of 5% per annum. The purchase price of the home must be no more than $225,000.
How to apply: https://www.princeedwardisland.ca/en/information/finance-pei/down-payment-assistance-program

 

Quebec

Program: Accès Condos
Provider:
 Société d’habitation et de développement de Montréal (SHDM)
Details: Launched in 2005 by the SHDM, Accès Condos has provided more than 3,600 affordable units that promote home ownership throughout Montreal. Qualifying buyers must make a minimum $1,000 deposit and receive a 10% purchase credit, which is used for the down payment on the house in an approved development.
How to apply: https://accescondos.org/en/

 

financial support

National Non-Loan Programs

First-Time Home Buyers’ (FTHB) Tax Credit

Provider: Government of Canada
Details: The FTHB Tax Credit offers a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009. For an eligible individual, the credit will provide up to $750 in federal tax relief.
Link: http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html

 

Home Buyers’ Plan (HBP)

Provider: Government of Canada
Details: The Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $25,000 in a calendar year from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability.
Link: http://www.cra-arc.gc.ca/hbp/

 

GST/HST New Housing Rebate

Provider: Government of Canada
Details: You may qualify for a rebate of part of the GST or HST that you paid on the purchase price or cost of building your new house, on the cost of substantially renovating or building a major addition onto your existing house, or on converting a non-residential property into a house.
Link: http://www.cra-arc.gc.ca/E/pub/gp/rc4028/rc4028-e.html

Source: RateSpy.com – By  on November 26, 2018

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Mortgage stress test vs. high interest rates: which has impacted the Canadian housing market more?

Photo: James Bombales

When the Bank of Canada decides to hike interest rates, the impact of the move tends to peak six quarters after the fact. But, according to one economist, the effect of the current rising-rates environment is already making itself felt, at least when it comes to the Canadian housing market.

“Even though the first rate hike of this cycle, let alone the subsequent moves, was administered less than six quarters ago, there’s already pain being felt,” writes CIBC economist Royce Mendes, in his latest note.

The BoC hiked the overnight rate to 1.75 percent in October, and is widely expected to do so again in the new year. And while there’s been some debate among industry experts about whether higher interest rates or the stricter mortgage rules introduced in January are to blame for a slowdown in Canadian housing activity, Mendes says it’s the former that is dealing the biggest blow.

“It’s difficult to identify how much of the recent slowdown in housing activity has been due to tighter mortgage rules versus higher interest rates,” he writes. “But, based on prior estimates of the effects of the rule changes alone, the slowdown in lending has been more precipitous.”

That’s because, while the market has largely adjusted to the effects of stricter mortgage rules over the course of the year, it’s only now starting to contend with the impact that higher interest rates will have on would-be homebuyers.
“It’s hardly a stretch then to say that the housing market is already feeling some pressure from rate hikes, particularly since many mortgages are now rolling over at higher rates for the first time in a quarter-century,” writes Mendes.

That could mean that, heading into 2019, housing activity will cool even further, as the effects of the rising interest rate environment make themselves known.

“Given the lags in monetary policy, even as the effects of the mortgage rule changes wane on a year-over-year basis in the months to come, the impacts of rate hikes will actually become more apparent.”

Source: Livabl.com- 

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