For many fine folks here in Vancouver the dream of being a homeowner is becoming just that... a dream! But yesterday, our premier Christy Clark announced a new BC Government program called the 'BC Home Owner Mortgage and Equity Partnership' program. This program aims to help those first time homebuyers put together that, often unattainable, down payment by offering an interest free loan up to $37,500. That kind of money towards a down payment really would be a dream come true! With that in mind, maybe it's time to rethink those over-indulgent Christmas gifts this year, and start putting aside a little more money for that down payment in 2017. Your savings will now get you twice as far!
Of course, your next question will be: do I qualify for this sweet deal? Here is the checklist you'll need to be eligible:
• You have never previously owned a property anywhere in the world.
• You are a Canadian citizen or a permanent resident for at least 5 years.
• You have lived in BC for at least 1 year.
• You plan to purchase a home for $750,000 or less.
• You pre-qualify for a mortgage for at least 80% of the home purchase price.
• You have a gross household annual income of less than $150,000.
• Your new home will be your principal residence.
If you answered yes to all of the above then you’re on your way to homeownership with a little extra help! Now, how much do you qualify for? Here are the specs of the loan structure:
• The BC Government will match your down payment amount up to $37,500.
• This is a 25-year loan that is interest-free and payment-free for the first 5 years.
• After 5 years, the 20-year repayment plan would be set at the prime lending rate plus 0.5%.
• The province will start accepting applications for the program on Jan. 16, 2017.
• The program is planned to be open until Mar. 31, 2020.
What does this all mean for you? Let’s look at an example of a $500,000 property. In this case, the minimum 5% down payment would be $25,000. With the help of this loan, you would only need to come up with $12,500 and the government would loan you the other $12,500. The important thing to recognize with this program is that it’s not ‘free money’. Be sure you have repayment plan in place that will work for you when those first 5 years fly by.
Of course, there is controversy whenever a program like this is implemented, but we think the bottom line is that anything to help first-time homebuyers to get into the real estate market is a positive move forward.
Let us know what you think. If you have any questions, please get in touch with us here at Blu. We’re always happy to discuss your home buying options.