Category: Top » Finance » Mortgage »

Canadian Government Grants for First Time Homebuyers

Buying a house these days is more difficult for young people purchasing their first home than it ever has been. The uncertainty in the market has made it an opportune time if you are buying your first house to get a good deal, but the banks are making it harder to get a mortgage. The more stringent guidelines that the banks have imposed are making it more challenging for people to qualify for a mortgage. The good news is that the Canadian Government is trying to help. They are offering government grants for first time homebuyers.

These Canadian government grants for first time homebuyers are making it possible for people to get into their first house much sooner than they would on their own. In addition, because there is no interest on the money and no monthly payment it makes it a little easier to qualify for a mortgage. If you're wondering if you will qualify for the government grants, for first time homebuyers you will be happy to know it is available, however if you have owned a house previously you do not qualify.

You must also have good credit to qualify and a preapproval from a bank showing that you are approved for a mortgage. It is important to note that not all banks will allow you to use a down payment that comes from a government grant. First time homebuyers should seek out the help of a mortgage broker in this situation, they are aware of the banks that will allow down payments from the Canadian government grants for first time homebuyers program.

So how does a person get a government grant? First time homebuyers must first speak to a mortgage broker and fill out an application for a preapproval. The mortgage broker should be able to tell you who is administering the program in your area. Once you get a pre approval, you will then make an appointment with the person in your area who handles the government grants. First time homebuyers may find the experience a little overwhelming but your mortgage broker will help guide you through the process.

First time homebuyers should be aware that it is necessary that you have some money saved by the time you move into your new house. The bank will want you to save up enough to pay for your lawyer fees and any other costs you might incur at closing. These are called your closing costs and the amount you should save is 1.5% of your house value, so if you buy a house worth one $100,000 you will need $1500 for closing costs.

Many people ask if they have to pay back the government grants for first time homebuyers, and the answer is no, however there is a catch. If you live in that house for twenty years you don't have to pay it back, if you sell the house before the twenty years then yes you have to pay it back when you sell the house. The good news is that there is no interest on the money so the balance won't grow, and you can even keep the appreciation in the house. What that means is, if you buy a house and then sell it five years later, and it's worth 20% more than when you bought it, you can keep that.

This is an amazing chance for first time homebuyers, if you're ready to buy a house but you don't have enough of a down payment its perfect. The best thing is, houses grow in value about 5% each year and if you had to wait an extra year to save for the house you like today, it would cost you 5% more to buy. If you're interested, don't wait because the Canadian Government Grants for first time homebuyers program is over in March 2009.

Seed Newsvine

Rating: Not yet rated --Choose-- 0 1 2 3 4 5

Comments

No comments posted.

Add Comment

Your Name:


Your Email:


Comment

Enter the code shown

Popular Articles in this cathegory

1: Adjustable Rate Mortgages Are OK For The Short Run
2: Reverse Mortgages: A Financial Solution for Those Caring for Aging Parents
3: Retirement Planning and Reverse Mortgages
4: Reverse Mortgages or Relocation? A Guide for Retirees Ready to Enjoy Their Home Equity
5: 10 Facts about Reverse Mortgages