CMHC First Time Buyers Incentive Plan for 2019
According to the federal budget a new incentive for Home buyer’s plan will take place in the following months to come, to help you out to fulfill your home ownership dream under the CMHC (Canada Mortgage and Housing Corporation) first time buyer’s plan. but have in mind the following.
- Home Buyer will still have to raise the minimum percentage to apply for an insured mortgage through CMHC.
- This will apply to households on annual income lower than $120,000.
- This plan will leverage a 5% up to a 10% of your down payment.
- Buyers of newly-constructed homes would get 10 per cent of the home price, while those purchasing an existing property would get five per cent.
How exactly will you need to repay the money?
Home buyers would eventually have to repay the CMHC, either when the home is sold or, if they wish, sooner. It’s not clear, though, whether homeowners would simply repay the sum the CMHC originally advanced — which would make the money an interest-free loan — or whether the government would get a share of the sold price — five per cent or 10 per cent, depending on the equity share it originally contributed.
This is an important detail, and some simple math shows why. Say you’re buying a $400,000 home with a 10 per cent CMHC incentive worth $40,000. If your home value rose to $600,000 over the years, a zero per cent loan would mean that you’d still have to return only $40,000. An equity-share type of arrangement would mean you have to return $60,000, which is a much better deal for the government and taxpayers. in the other hand if your property lost value , then the same share percentage of 10 per cent should follow .
Are you starting to think about buying your new home, you need to know more about this incentives? Don’t hesitate to contact me .
Source: https://globalnews.ca/news/5075888/federal-budget-2019-cmhc-shared-equity-mortgage/
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