On December 15, Premier Christy Clark announced a new provincially backed loan program for first-time homebuyers aptly named Home Owner Mortgage and Equity (HOME) Partnership. Applicants will be able to receive up to $37,500, or five per cent of the home’s purchase price like a secondary mortgage for 25 years. The loan will be interest-free for the first five years and after that buyers can either repay their loan or enter into monthly payments at current interest rates. The repayment plan would be set at the prime lending rate plus 0.5 per cent, leaving the homeowner to pay back both the original mortgage and the down-payment loan at the same time. To be eligible for the loan, all individual on the title must satisfy the following requirements:
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Must reside in the property
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Have been a Canadian citizen or permanent resident for at least five years
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Have resided in British Columbia for at least one year immediately preceding the date of application
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First-time buyer who has not owned an interest in a residence anywhere in the world at any time
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Use the property as their principal residence for the first five years
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Purchase a home that has a purchase price price of $750,000 or less (excluding taxes and fees)
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Obtain a high-ratio insured first mortgage on the property for at least 80% of the purchase price
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Have a combined, gross household income of all individuals on title not exceeding $150,000
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Have saved a down payment amount at least equal to the loan amount for which the buyer applied
The application process begins in January 16, 2017, for purchases that will close on or after February 15, 2017 and will end in March 31, 2020. For more information about the program, visit BC Housing. Or better yet, give me a call and I can put you in touch with an expert mortgage broker.