The First-Time Home Buyer Incentive (FTHBI), introduced earlier in 2019 and officially launched on September 2nd, is still a bit of a mystery to many and some of the finer points of the program can easily cause some confusion. One Link Mortgage expanded on several of these points and provided a slightly more detailed explanation in what we like to call "First-Time Home Buyer Incentive Fact or Fiction":

"First time home buyers can get 10% down payment assistance on the purchase of a 2 year old condo that has never been occupied."

FACT - A home or condo (think show home) that has not been lived in is considered a new home and qualifies for 10% down payment assistance from the FTHBI program. Note - the buyer still needs to put the minimum 5% down.

"The amount to be repaid to the government is the amount of the original incentive."

FICTION - You must repay the original percentage of the FTHBI program based on the current market value of the home. For example, if you purchase a house for $250,000 with 5% down and received the FTHBI of 5% down ($12,500) and then sell the house 15 years later for $400,000, you will need to repay 5% of the $400,000 ($20,000) (fair market value) to the government to repay the incentive.

"The FTHBI will create additional legal costs when a client purchases a home."

FACT - The lawyer will have to register an additional mortgage to the title of the property which will result in extra costs for the client. If the client chooses to refinance, (if the government allows it without repayment of the incentive), there will be additional fees to obtain a postponement of the incentive on title. If the client chooses to payout the incentive without selling their home, they will need to have an appraisal completed to assess fair market value of the home as well as a lawyer involved to remove the charge on the title of the property.

If you have any questions about the First-Time Home Buyer Incentive or are unsure if it is even the right choice for you, don't hesitate to contact one of the experienced Mortgage Brokers at One Link Mortgage. Call 204-954-7620 for more information today!