The program will provide a government-backed loan of up to $37,500, or five per cent, of the purchase price of a home for qualified buyers, starting Jan. 16.
The goal is to match part of a person’s down payment to help them afford to buy their first home, as long as they already qualify for a mortgage under federal rules and the home is worth less than $750,000.
“What we know is for many first time home buyers qualifying for a mortgage is hard, but getting past that down payment and scraping together the $25,000 or $50,000 you might need to be able to get into your first home is just impossible,” said Clark.
The 25-year loan is interest-free for the first five years, and does not require the homeowner to even pay down the principal during those first five years, as long as they keep the home as their principal residence. It will be recorded as a second mortgage on the title of the property.
After the first five years, the province expects monthly payments at the current interest rate, with the loan repaid over the remaining 20 years. Extra payments or full repayment at any time will be allowed, according to the government.
The new down payment program will cost government an estimated $703 million over three years, and is expected to help 42,000 people, according to government figures.
To be eligible, a homeowner must:
• Have saved a down payment amount at least equal to the loan amount for which they are applying from government.
• Have been a Canadian citizen or permanent resident for at least five years.
• Have lived in B.C. for at least one year prior to the sale.
• Be a first-time buyer who has not owned an interest in any residential property anywhere in the world at any time.
• The home must have a purchase price of less than $750,000.
• The buyer must already be able to qualify for an insured high-ratio first mortgage for at least 80 per cent of the purchase price.
• The combined gross household income of all people on title must not be more than $150,000.
__________________ "The great promise of the Internet was that more information would automatically yield better decisions. The great disappointment is that more information actually yields more possibilities to confirm what you already believed anyway." - Brian Eno
Would be foolish not to take advantage of a $37k no interest five year loan. First home buyers should take this amount, invest it for 5 yrs, pay back in full at end of term and pocket the difference.
The goal is to match part of a person’s down payment to help them afford to buy their first home, as long as they already qualify for a mortgage under federal rules and the home is worth less than $750,000.
They should just bring out 200 year inheritable mortgages while they are at it. Surely they can get home prices to $2 million average in no time, and enslave generations in debt. No problem, because the economy will survive purely on banking and real estate industries.
• The home must have a purchase price of less than $750,000.
Okay, well clearly this means buying in Vancouver is out.
• The combined gross household income of all people on title must not be more than $150,000.
Who the hell is buying a home valued as high as $750,000 with a combined gross income of $150,000 or less? Can you afford it? Sure. Should you spend that kind of money on a home with only $150k in gross yearly income? Probably not.
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Originally Posted by Azure
Typical dumb take.
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That may be the worst idea ever.
Some developer who wants to build a cheap community somewhere out by Hope is laughing all the way to the bank. And has some amazing political connections.
Some developer who wants to build a cheap community somewhere out by Hope is laughing all the way to the bank. And has some amazing political connections.
Hope, BC is also probably the only hope most 20 somethings in the lower mainland have of ever owning a house.
Government policy, it seems, is not without a sense of irony.
• The home must have a purchase price of less than $750,000.
Okay, well clearly this means buying in Vancouver is out.
Depending on your definition of Vancouver (proper vs. GVA), there are literally thousands of homes priced below $750,000 at this moment.
Quote:
Originally Posted by TorqueDog
• The combined gross household income of all people on title must not be more than $150,000.
Who the hell is buying a home valued as high as $750,000 with a combined gross income of $150,000 or less? Can you afford it? Sure. Should you spend that kind of money on a home with only $150k in gross yearly income? Probably not.
Using the CIBC mortgage calculator, if you earn $150,000, you can borrow $700,000. Everyone spends their money differently, according to their own values. Some people want to travel the world for two months of the year. Others want the latest car. Some want to save every penny. Others want a more expensive home. I hate when people say you shouldn't buy a home, because they wouldn't do it.
As a Vancouver resident, I know many people that own homes in GVA that people who don't live in the market think is crazy. People in New York might think the house is a bargain. People in rural Saskatchewan will tell you they could buy hundreds of acres for the same price. People in Vancouver have made the decision that they want the lifestyle, climate, etc. and have decided to allocate more of their earnings towards housing costs than previous generations, or other cities have. If they determine that the costs outweigh the benefits of living here, then they move to other places.
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B.C. Government to offer downpayment loans for first-time home-buyers
