You know that feeling when you’re on a roller coaster? It’s scary yet totally thrilling at the same time. Becoming a first-time homebuyer is a bit like that – exciting yet scary! You’re taking the next big leap in your adulthood and officially becoming a homeowner for the first time. But you’re also making the biggest purchase you’ve ever made.
You’ve always dreamed of being able to find a home you can make your very own. But there are other emotions running through your brain during this time. Are you making the right decision? Can you actually afford it? Are you crazy about buying a house right now?
What’s Happening in The Real Estate Market?
In Ontario, soaring real estate prices make it difficult to get your foot on the property ladder. With the right mindset and a little knowledge, it is possible. The high level of fierce competition has forced many people to expand their search criteria and stretch their budget to find a property. During the pandemic, many people searched for new properties where they could work from home but still be within driving distance of the GTA. It caused housing prices to soar all across Barrie and Simcoe County. Mortgage rates were incredibly low so many people were quick to snap up a new property, even with the low supply of housing.
Interest rates are expected to climb, especially if the housing market cools off in the coming year. It’s predicted that the cost of a home will rise regardless of a lull in the buying boom. Whether the buyer gets a variable mortgage rate or a fixed mortgage rate becomes an important consideration. Consulting with a mortgage broker is your best bet in securing the lowest mortgage rates while discussing the best options for your specific situation.
It’s smart to do your research when finding a reputable real estate agent who knows the area to help you in this competitive market. It’s also important not to get your hopes up when putting an offer in on a home and you have to be prepared to review and revise your offer multiple times in the case of a bidding war.
Where’s The Silver Lining?
The good news! There are many initiatives (including ones that were just announced in the 2022 federal budget) that help first-time homebuyers afford their very first home.
The Home Buyers’ Plan
Through this program, you can withdraw up to $35,000 from your registered retirement savings plan (RRSP). Couples can withdraw up to $70,000. The money must be repaid annually over 15 years, otherwise, it’s taxed as income.
First-Time Home Buyers Incentive
This incentive helps first-time homebuyers cover 5% or 10% of the purchase price of the house through an interest-free loan. You have to pay the government back the same percentage of your home when you sell or after you’ve owned the home for 25 years. To qualify for this loan, you will have to review your household income, mortgage amount, and location. This program has been extended until 2025.
Land Transfer Tax Rebate
The land-transfer tax paid on the first $368,000 of qualifying homes may qualify for a rebate of up to $4,000 for first-time home buyers. To claim the refund, you must be a legal adult who has never owned a home or has an interest in a home.
Take Advantage Of Expert Advice
Your regular mortgage payments will be higher if you have a small down payment. It’s important to create an extra cushion in your budget, especially with interest rates on the rise. As a first-time homebuyer, you have more support than ever before. Work with a reliable mortgage broker, like myself, Darren Robinson, to help you secure the lowest mortgage rates possible, and I’ll help you with your mortgage pre-approval so that you can purchase that new home of your dreams. And, with the added benefit of being a financial advisor, I can help you with all your questions or concerns throughout the entire process when it comes to your finances as well. Give me a call at 705-315-0516 for more information. Working with a mortgage broker is completely free and will help you save money wherever possible. Let’s take your next big step together.