The First Home Savings Account (FHSA) in Canada is a tax-advantaged savings plan designed to help Canadians save for their first home. Here are the key features of the FHSA:

• Eligibility: Available to Canadian residents who are at least 18 years old and have not owned a home in the last four years.
• Contribution Limits: You can contribute up to $8,000 per year to a maximum lifetime contribution limit of $40,000.
• Tax Benefits: Contributions are tax-deductible, meaning they can reduce your taxable income, similar to an RRSP (Registered Retirement Savings Plan). Additionally, the investment growth and withdrawals for the purpose of purchasing a first home are tax-free, similar to a TFSA (Tax-Free Savings Account).
• Qualified Investments: Funds in an FHSA can be invested in a variety of eligible investments, including stocks, bonds, mutual funds, and GICs (Guaranteed Investment Certificates).
• Withdrawal Conditions: Withdrawals are tax-free when used to purchase a qualifying first home. If the funds are not used for a home purchase, they can be transferred to an RRSP or RRIF (Registered Retirement Income Fund) on a tax-free basis, subject to RRSP contribution limits.

The FHSA aims to make it easier for Canadians to save for their first home by combining the benefits of both RRSPs and TFSAs

• Criteria for Existing Homes

• Full rebate up to $8,000 on a purchase price of $835,000 or less.
• Partial rebate on a purchase price between $835k - $860k.
• Partial rebate on a purchase price of $835k or less where one borrower is not a FTHB.

• Criteria for New Builds

• Full rebate on a purchase price of $1.1 million or less.

The first step in the home buying process is completing a discovery call with one of our mortgage advisors.

• Step 1 - Initial Discovery Call with One of Our Trusted Mortgage Advisors

• During your discovery call, we discuss your unique financial situation, your property objectives, your borrowing capacity, the steps to take in the home buying process, & advise on any hurdles you may encounter to help pave the way for a smooth home buying experience.
• This initial step provides clarity to common questions or concerns. We even go through some what-if calculations & scenarios to help ensure you have a strong understanding of what your options are. A detailed action plan is then prepared, giving you the confidence to move forward with certainty.

• Step 2 – Provide Information: Application & Documents

• At this point, if you would like to proceed, as part of your “Let’s Get Started” package, we will send you a formal mortgage application, credit consent form, & a checklist of lender required documents in which you can safely upload into your encrypted client portal. Once complete, the heavy lifting on your end is done & we will proceed with setting up your new pre-approval.

• A purchase deposit demonstrates the buyer’s good faith to the seller to close on their purchase. This deposit is held in trust & then credited back to the buyer at completion as part of their total down payment.
• For example, if your total down payment is $25,000 & your deposit is $10,000, you will only owe the difference of $15,000 at time of completion. Alternatively, if your down payment is $25,000 & you agree to a $30,000 deposit, you will be reimbursed the $5,000 at completion.
• Typically, the deposit is 5%, sometimes 10% of the purchase price.
• Is this deposit due right away? No, not until you agree to move forward with your sale. In other words, your deposit is due once you complete your due diligence period (also known as your subject removal period), meaning you’ve secured firm mortgage financing & completed your home inspection.

• Just click the “Apply Online” button on our website to get started.
• With a traditional application & a few lender required documents in hand, we’ll have your pre-approval to you within 48 hours.
• During this time, we will reach out to you to conduct a one-on-one success planning meeting aimed at providing you with an understanding of your goals & help to educate you on strategies to help you get ahead.
• All of this from the comfort of your own home!

• Remember the FOUR benefits to investing in real estate: Principal Pay Down

• Unlike your rent payment, mortgage payments include a principal component that otherwise brings your total monthly mortgage balance owing down, & therefore your equity up.

• Appreciation

• Appreciation refers to the increase in your home’s value over time. Your home value may increase for a number of reasons, including, interest rate fluctuations, supply & demand, inflationary periods, & even emotional buyers shifting the market.

• Cash Flow

Whether you’ve purchased a stand-alone rental property or have a rental component to your home, this secondary source of income (ideally above & beyond your total monthly bills) provides great value.
For Example

• Rent = $2,500
• Mortgage = $1,500
• Expenses = $500
• Cashflow = $500

• Sweat Equity

• Sweat equity refers to the physical improvement of upgrading your home through renovations.

• Let’s look at a simple example:

• Based on consistent payments at a rate of 2.59% over 25 years with 5% down ($25,000) & a 2.5% conservative annual appreciation.

• TODAY
  • Purchase Price = $500,000
  • Mortgage Balance = $494,000 - with mortgage loan insurance

• In 5 Years
  • Value = $565,704.11
  • Mortgage Balance = $418,983.89

• 5-year estimated property value = $565,704.11
• 5-year principal pay down = $75,016.11
• 5-year earned equity = $121,720.22 - includes day one loan insurance premium
• 5-year equity outlook = $146,720.22

Remember – It’s time in the market that builds WEALTH in real estate!

• Mortgage loan insurance, also known as mortgage default insurance, is an insurance premium paid by the borrower, to in which protects the lender for in the event that the borrower defaults on their mortgage obligations.
• Mortgage loan insurance is provided by one of three institutes, CMHC, Canada Guaranty, or Sagen. Mortgage loan insurance is implemented on any mortgage that has a down payment of less than 20% of the purchase price of a home. The insurance premiums range from 0.50% to 7.0% and can be added directly onto the mortgage amount.

Let’s look below at the main closing’s costs associated with buying your new home:

• Land Transfer Tax

  In the province of BC, when ownership transfers title, buyers are faced with a land transfer tax – or better known as property transfer tax

• + 1% on first $200,000
• + 2% on balance up to $2,000,000
• + 3% on the balance over $2,000,000
• + 2% on balance over $3,000,000 **If Residential**

• Appraisal Fees

• Your lender may ask you to order a home appraisal as part of your conditions. This cost varies depending on property value, but appraisals typically range between $300 - $500.

• Legal Fees

• At the final stage of your home buying process, your legal team (lawyer or notary), are responsible for legalizing your transaction, including registering your mortgage & transferring title. This estimated cost is between $1,500 - $2,500.

• Home Inspection

• A home inspection is optional in most circumstance and will cost between $300 - $500.

• Home Insurance

• Most lenders will require proof of home insurance at completion. This cost will vary, but you should budget $50 - $100 per month.

• Costs of Newly Constructed Homes

• On a new construction purchase, you will likely be required to pay a 5% GST tax at completion, on top of your down payment.

• Adjustment Costs

• If the seller has pre-paid property taxes, water bills, or utilities in advance for that year, you’ll need to reimburse them at completion via your legal team’s final adjustments. This can potentially add hundreds to your closing costs. On a positive note, the first few months in your new home will be paid for.

• Title Insurance

• Title insurance can safeguard you against fraud. Fees here range from $150 - $300 & are arranged by your legal team.

• Down Payment

• Your down payment is the accumulation of funds that make the difference between your total purchase price & your total mortgage.

• Minimum Down Payment

• 5% on the first $500,000
• 10% on the next $500,000 up to $1,000,000
• 20% on any purchase over $1,000,000

• Moving-In-Costs

• Make sure to budget for last minute expenses such as professional movers, locksmiths, cleaning supplies, etc…

• Common home ownership costs include:

• Mortgage Payment
• Property Taxes
• Home Insurance
• Strata Fees (If applicable)
• Utilities – Heat, Water, Gas
• Internet & Cable

Our trusted mortgage advisors will give you the upfront options you need & help you put together a plan that fits your budget.

One of the benefits to working with an independent mortgage advisor, is that we situate you with the very best lender, with the best terms, & the lowest guaranteed rate that supports your needs of today & goals of tomorrow.

• What our mortgage team provides you that the corporate banks can’t!

• Options – We have access to 100+ lenders & 5,000 products, resulting in you saving money and having multiple options, where the bank offers you their products only, which do not necessarily have the lowest rates.
• Exceptional Service – Our office doors do not close come evenings or weekends. We are available 24/7 & work around the clock with you.
• Continuous Support – We are here for you for the life of your mortgage, should anything come up, or questions arise.
• Unbiased Advice – We work for you & not the lenders.
• Free! – Our service to you is free with NO hidden fees.
• We Negotiate on Your Behalf - Because of our partnerships, we have the upper hand in securing our clients the lowest rates.
• Relationships – With your best interest at heart, we win when you win. Our focus is to help you meet your goals while educating you on building long term wealth in real estate.

• First time home buyers who purchase a qualifying home can claim a non-refundable tax credit of up to $750 for the year of purchase.
• This value is calculated by multiplying $5,000 by the lowest personal income tax rate (15% in 2022).
• Currently, the proposed change is $10,000, otherwise resulting in a $1,500 credit.

• As a first-time home buyer, the Home Buyers Plan allows you to withdrawal up to $60,000 from your registered retirement savings plan (RRSP), for the purpose of a down payment on an existing home or to build a home for yourself, or a related person with disability.

• When you’re making an offer, you always want to put your best foot forward. Working out a strategy with your realtor will help you competitively if you find yourself in a multiple offer situation.
• Our recommendation for a successful offer requires speaking to one of our team members to have your pre-approval in place.
• Setting up your pre-approval will give you the ceiling price of what you can qualify for, your expected payments, & the costs needed to complete, including your total down payment. This eliminates any surprises!
• Our guaranteed client pre-approvals will also address your long term goals and give you the strategies and options to help you achieve long term success.
• As every offer will be unique, this allows us to be creative with giving you that competitive edge in winning your offer.

• In a purchase contract, these are often call subjects.
• On the financing side, we are looking for the condition “subject to financing” as this allows us, your mortgage team, to finalize your new mortgage prior to the final commitment of your offer.
• Additional conditions include “subject to appraisal”, “subject to inspection”, “subject to strata documents”, “subject to sale”, and many more. Any one of these subjects will give you the option to back out of your offer given one or more avenues do not align with your vision.
• Typical conditions are in place for 7-10 days, and are ultimately put there protect you, the buyer. If you find yourself in a competitive market, it’s always best to speak to us prior to offering without subjects.
• Why do I need “subject to financing” if I have a pre-approval?
• The answer is easy - Your “property” is not pre-approved. With every mortgage, you, as well as your property, will both need to meet certain lender criteria’s.

• The quick answer is yes, you are.
• The legality of your purchase includes you owning a percentage of your new home, and so does your co-signer. While your co-signer is looked at as a prior homeowner, their portion of the tax credit would not be exempt leaving your portion to still be exempt.
• For example, you and your co-signer purchase your new home as “Tenants in Common” where you own 99% & your co-signer owns 1%. In this circumstance, you would be exempt from 99% of the taxes.

• A pre-approval mortgage is not one that is done on an online pre-approval app or calculator. These options though are a great general tool, they do not address many of the underlining components that ensure accuracy when securing mortgage financing.
• A pre-approval mortgage requires submitting an application, pulling your credit, & submitting supporting documentation to your trusted mortgage advisor.
• At Boychuk Mortgage Group, your pre-approval includes a one-on-one success planning session to help educate you & to create a long-term mortgage & wealth strategy!
• We consider our pre-approvals a guaranteed stamp of approval as we have done the proper due diligence to protect your best interest, in advance of shopping.
• Pre-approvals are a free, no obligation step, put in place to help you understand your unique borrowing power before starting the home buying process with your realtor.
• Your pre-approval rate will be held for 120 days (sometimes more), protecting you should rates rise. This comes with a guaranteed best rate at time of submission.
• Understanding your borrowing power at the time of offer, not only provides you with the upper hand in negotiations, but it gives you the confidence needed to act.

Improving your credit score involves paying bills on time, reducing debt, and avoiding new credit inquiries. Our team can provide personalised tips to help you strengthen your credit profile and improve your mortgage eligibility.

For more information on how Boychuk Mortgage Group can assist you with your first-time home buyer mortgage needs, contact us today. Let us help you turn your dream of homeownership into a reality.

Yes, gifts from family members or borrowed funds (e.g., a personal loan) can be used for your down payment. However, it's essential to understand the implications and ensure you meet lender requirements.

When choosing between fixed-rate and variable-rate mortgage terms, first-time home buyers should consider factors such as interest rates, budgetary constraints, future financial goals, and risk tolerance. We guide you to help you select the best option for your circumstances.

Mortgage pre-approval involves assessing your financial situation, credit history, and income to determine the maximum mortgage amount you qualify for. Pre-approval provides confidence and clarity as you shop for your first home.

Government programs such as the Home Buyers Plan, the First Home Savings Account, & the First Time Home Buyers Program offer qualifying first-time home buyers financial assistance and tax benefits. These programs can reduce upfront costs and facilitate homeownership.

First-time home buyers in Canada typically need a minimum down payment of 5% of the purchase price. This can vary depending on the purchase price and mortgage insurance requirements.

An Increase to the Insured Mortgage Price Cap:

The government has increased the price cap for insured mortgage from $1 million to $1.5 million, reflecting the realities of today’s housing market.
This change will help more Canadians qualify for insured mortgages with a down payment of less than 20% (80% loan-to-value or higher). This will make home ownership more attainable, especially for younger Canadians.

Eligibility for Insured Mortgage

• The borrower is purchasing an owner-occupied home or second home with less than a 20% down payment.
• The borrower’s purchase price is no greater than $1,5000,000.
• 30-year amortizations will apply to first time home buyers, otherwise 25-year amortizations will apply.

The Minimum Down Payment Requirement on Insured Mortgages:

• 5% for the portion of the purchase price up to $500,000, and
• 10% for the portion between $500,000 and $1.5 million.

This means that buyers will be eligible to purchase an owner occupied home upwards of $1,500,000 with a minimum down payment of $125,000.

Effective December 15th, 2024.

Expanded Eligibility for 30-Year Amortizations:

Both first-time homebuyers and all buyers of new build homes will now be eligible for 30-year amortizations on insured mortgages.

This change will help more Canadians qualify for insured mortgages with a down payment of less than 20% (80% loan-to-value or higher).

This is a crucial step in reducing monthly mortgage payments and helping more Canadians achieve home ownership.

Eligibility for First Time Home Buyers

• The borrower has never purchased a home before.
• The borrower has not owned or occupied a principal residence in the last four years.
• The borrower has recently experienced a breakdown in a marriage or common-law relationship, in line with the Canada Revenue Agency’s approach to the Home Buyers’ Plan.
• The borrower is purchasing an owner-occupied home with less than a 20% down payment.

Eligibility for Buyers of New Build Homes

• For buyers of newly built homes, the home must not have been previously occupied, though newly constructed condominiums with interim occupancy periods will still qualify.
• The borrower is purchasing an owner-occupied home with less than a 20% down payment.

Effective December 15th, 2024.