Buying privately for the First Time Home Buyer

If you are a first time home buyer, buying privately can be a little scary.
 
Hopefully by reading this section you will feel a little bit more comfortable buying privately.

Special Programs for First Time Home Buyers

If you are a first time home buyer, there are special programs for you

Only 5% down payment

The Canadian Mortgage and Housing Corporation (CMHC) allows any buyer across Canada the opportunity to purchase a home with only 5% down..as opposed to the standard 25% down. Of course they will charge you a fee for this service. If 10% down, the fee is 3.75% of your mortgage amount, and will be added on top of your mortgage. For example, if you have a $100,000 mortgage (after downpaument), a $3750 CMHC fee (insurance fee) will be added to your mortgage for a total of $103,750. The more you put down, the less the percentage CHMC charges.

Using Your RRSPs for Down Payment of a Home!

Another feature for the first time home buyers is the ability to use your Registered Retirement Savings Plan (RRSP) as a down payment.
 
Because this is a Federal Government initiative, there are of course, restrictions that you as a buyer will need to follow:
 
1. You will need to meet CMHC First Time Home Buyers Program definitions.
 
2. Each buyer may use up to $20,000 from their RRSP for down payment. That means if you are married, you and your spouse can each claim $20,000 for a total of $40,000
 
3. The buyer is required to repay the loan in equal amounts over the next 15 years. If you don't, you will pay tax on that portion.
 
4. The home you buy must be your principle residence and it must be in Canada.