First-Time Home Buyers Luck Out with Mortgage Changes for 2017
Some big changes have been made to home buying and mortgages that are taking effect in 2017 that affect first-time homebuyers in Ottawa and people looking to insure mortgages with CMHC and Genworth. Navigating your way through the complexities in qualifying for a great mortgage is becoming more difficult, making working with an expert broker more important than ever before. Your ReferralMortgages.com team has delved deep and we have put together the goods on how each of these changes will affect you.
Land Transfer Rebate Doubles for First-Time Home Buyers
For qualified buyers buying their first home, a rebate on the land transfer tax helps to offset the cost of purchase. Previously, this amount was capped at 2,000 dollars. The rebate has been increased to a maximum of 4,000 dollars, effective January 1, 2017. This equates to a full rebate of the land transfer tax for a home up to 368,250 dollars in Ottawa! Claimants have 18 months to file their application for rebate, but most lawyers will provide the information upon closing.
Leverage your RRSPs to Increase your Down Payment as a First-Time Home Buyer
Coming up with a sizable down payment can be difficult for first-time buyers but if you have built up RRSPs at a minimum of 90 days before withdrawal, you can leverage this account to reduce your mortgage principal tax-free! While this is a convenient option for many people, there are a few things to consider:
- You can withdraw a maximum of $25,000 per person ($50,000) per couple
- You have 15 years to repay your RRSP account
- Repayments do not count as tax credits
- There are tax penalties if the full amount is not repaid yearly
Contact your ReferralMortgages.com expert today to learn if the First-time Home Buyer RRSP Program is the right fit for your situation!
CMHC Increases Insurance Premiums
While we wish we could only deliver positive news to you, we would be remiss if we didn’t talk about the increase to insurance premiums by CMHC. While the numbers may look ugly at first glance, your ReferralMortgages.com team has done some serious math to help you see how the increase will affect the average Ottawa mortgage being insured. We’ve found the following:
- The average mortgage amount insured by CMHC is about $245,000
- With down payments from 5-10%, the average was roughly 8%
- The new rate would cost the average mortgage holder an additional $5.00 a month based on a 5-year term amortized over 25 years.
While no one likes to see increases, with interest rates on mortgages still at all-time lows, the CMHC increase still keeps home buying or refinancing reasonable.
For more information on how these changes affect you, or to see how affordable we can make your mortgage, contact your expert brokers at ReferralMortgages.com