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| Government Assistance |
| Thousands of Canadians have greatly benefited from government incentive programs geared towards helping first-time buyers realize home ownership. |
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| Programs such as the RRSP Home Buyers Plan, the Ontario Home Ownership Savings Plan, and the 5% Down Payment Plan have all made housing more accessible to first-time purchasers. |
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| RRSP Home Buyers Plan |
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| If you (or your spouse) have not owned a principal residence, you are eligible to participate in the RRSP Home Buyers Plan. Each spouse can withdraw up to $20,000, for a total of $40,000, from their RRSPs under the plan. |
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| Just complete a Form T1036 (available from your Revenue Canada district office) and submit it to your RRSP issuer after signing the agreement of purchase and sale. Once approved, the form gives you permission to withdraw funds from your RRSP without taxes being withheld. |
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| The money you withdraw from your RRSP must be repaid over a period of not more than 15 years to retain your tax deferred status. Payments begin the second year following the year in which the withdrawal is made. |
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| Ontario Home Ownership Savings Plan |
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| If you're an Ontario resident, over 18 years of age, and earning less than $40,000 per annum (or if you and your spouse have a combined income of less than $80,000), the Ontario Home Ownership Savings Plan may work to your advantage. |
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| To qualify, you must open an Ontario Home Ownership Savings Plan at any financial institution across the province by December 31. Funds deposited into the OHOSP will earn interest at competitive rates. Only one OHOSP can be opened per person (joint accounts are not available). |
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| Ontario Home Ownership Savings Plan (OHOSP) tax credits are available on annual contributions of $2,000 individually or $4,000 per couple. Credits vary depending on income and the amount invested in your OHOSP, but generally, you can earn tax credits of up to $500 individually or $1,000 per couple for five consecutive years. |
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| The plan must be closed and the funds used to purchase a home by the end of the seventh year, otherwise you will have to repay your OHOSP tax credit with interest. |
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| 5 Percent Down Payment Plan |
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| It's true! The 5% downpayment program has opened the door to over 400,000 families in Canada since the federal government launched the program in 1992. Now the program has been expanded to allow any Canadian or landed resident the chance to buy a home with 5% downpayment regardless of whether you currently own or rent! |
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| Purchasers who can easily afford monthly mortgage payments but are having difficulty accumulating a downpayment may be eligible for financing of up to 95 per cent based on the plan. The property must be used as a principle residence and not exceed a pre-established price ceiling. A maximum total debt ratio of 40 per cent, including mortgage principle, interest, taxes, outstanding loans, and credit cards, exists. |
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| The program applies to any type of home available in Canada from condos to townhomes, semis and fully detached homes. You can select from new construction to resale and there is no minimum house size. There are however price ceiling limits in effect and they vary across the country ranging from $125,000 in smaller communities to $250,000 in major centres like Vancouver, Toronto and Ottawa. Talk to your local Keller Williams Sales Representative or your bank for details in your area. |
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| You may be surprised to see how affordable it is to own your own home. There is a mortgage calculator that will show you the downpayment required, the monthly mortgage payment and how much income you need to qualify to own the house. Studies by Canada Mortgage and Housing Corporation, CMHC, have shown that most first time buyers overestimate the cost of homeownership by 70%. See for yourself that with today's low interest rates that owning can be cheaper than renting. |
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| We are also pleased to offer you a chance to be pre-qualified for a mortgage from our website too! This is an important part of the home buying process and is offered by most financial institutions at no charge and no obligation. Pre-qualifying is an important first step to knowing how much you can afford and protecting your interest rate, for a period of time, while you search for your perfect home. |
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| Want to know more ? Email Zena and let her show you how to make your dream of homeownership a reality. |
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