Being a first-time home buyer in Ontario can be exciting. Among the several benefits available to buyers like you, there’s one called First-Time Home Buyer Incentive. Let’s see what it takes to be eligible and qualify for this benefit.
First-Time Home Buyer Incentive, What is it?
The First-Time Home Buyer Incentive is a Canadian program developed to help buyers purchase their first home. The incentive allows 5% or 10% of the purchase price to go towards the down payment. It makes homeownership more affordable by lowering mortgage costs. First-Time Home Buyer Incentive Is similar to a second mortgage. Included in the total down payment is mortgage insurance.
Am I Eligible?
There are a few factors to consider to determine your eligibility for the First-Time Home Buyer Incentive.
- You must be a Canadian citizen, authorized to work in Canada, or a permanent resident.
- You and/or your partner are first-time house buyers.
- The total qualifying annual income will not exceed $120,000
- You can meet the minimum requirements for a down payment with traditional funds, withdrawal from an RRSP, or a financial gift from a relative.
- The borrowing total is no more than four times the qualifying income.
- The property must be located in Canada and used for year-round, full-time living. It can’t be used as an investment property.
How to Qualify
You need to get pre-approved for a mortgage to start, so it is a good idea to have the help of a mortgage broker to guide you. Once you’ve been pre-approved, found a potential home, and are eligible for the incentive, you can now apply.
- Fill out the 2 application forms to apply for the First-Time Home Buyer Incentive. One is the FTHBI-SEM information package, and the other one is the SEM Attestation and Consent Form.
- Give the two completed forms to your lender, who will then apply on your behalf.
- Give your solicitor the final signed copy of the shared equity mortgage package who will keep it on file for you.
- Wait for your acceptance, and when you receive it, you will need to activate your incentive. You will need to have the name of your lawyer or notary ready. This must be down at least two weeks before your closing date.
If you have any questions about this incentive, contact your mortgage broker who can help you move closer to owning a home.