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Last update: January 2, 2019
Mortgage Rates are subject to change without notice* View All Rates

First Time Homebuyer

What is it really about First Time Anything? A new chapter in one’s life, first love, first child, a milestone, excitement, fear, apprehension, joy – a rollercoaster of emotions. But we’ll all never forget these first moments. Well, it’s no different to deciding to be a First Time Home Buyer!

Owning a home is after all, for most of us, the single most expensive purchase we make in our lives. And we committed at Homefund to offer our services to you in making these special moments memorable and valuable.

Once you have decided that you would like to purchase your first home, we recommend that you contact us right away to get a Pre-Approved Mortgage. This process provides many benefits to you:
• Protects your rate from application date for 120 days
• Informs you of the maximum amount you qualify for, so you can shop in comfort
• Credit and income has been reviewed for approvability, and if there’s any issues, recommended steps can be employed to begin repairing
• In today’s hot real estate market, you’ll stand an advantage over other buyers who have not gone through this process from the sellers perspective and it may win you some concessions.

Another important part to this process is having the required down payment and additional funds for closing costs to make it happen. A minimum down payment of 5%* of the purchase price is required, and that can come from the following sources:
• Personal savings and investments
• Withdrawn from your RRSP plan – see details below
• Gifted from an immediate family member – parent(s), sibling(s), grandparent(s), guardian(s)
• Non-traditional sources: borrowed funds, gifts, etc.

There are a number of special programs that have been set up to help and provide assistance with this.

First Time Home Buyer Programs and Eligibility Requirements:

Home Buyer’s Plan
Ontario Land Transfer Tax Credit
Municipal Land Tax (Toronto only)
First Time Home Buyer Tax Credit

* If the purchase price is up to $500,000.00 – the minimum down payment is 5%. However, if the purchase price is over $500,000.00 – the minimum down payment is 5% of the first $500,000.00 and 10% on the amount over $500,000.00. This formula calculation for minimum down payment is used for purchases up to $999,999.00.

For down payments that are less than 20% of the purchase price or value of the property (lesser of the two), these mortgages must be insured against default, and the cost of the insurance premium is non-refundable, paid at the time of closing and may be added onto the mortgage. There are (3) insurers in Canada that lenders can go to obtain insurance for mortgages that require it. These are: Canada Mortgage and Housing Corporation (CMHC), Genworth Canada, and Canada Guaranty. The insurance premiums vary based on the percentage of down payment, and below is a Premium Rate Table currently in use:

  • 5% – 9.99% down payment > 4.00% of mortgage amount
  • 10% – 14.99% down payment > 3.10% of mortgage amount
  • 15% – 19.99% down payment > 2.80% of mortgage amount
  • 20% or more down payment > no mortgage insurance required
  • If your purchase price exceeds $1,000,000.00 – then automatically you must put at least 20% down payment, and they cannot be default-insured.

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    Homefund Corporation
    250 Ferrand Drive, Suite 407, Toronto, Ontario, M3C 3G8
    Tel: (416) 696-9866 Toll-Free Tel: 1-888-588-6666
    Fax: (416-696-9856 Toll-Free Fax: 1-888-588-2053
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