If you have been renting for many years, you may be considering purchasing a home for the first time. You have sacrificed to save up for your down payment, but now you’re ready to buy. Buying a home can be exciting and scary, all at the same time, especially since it’s a big purchase.
Understanding First-Time Home Buyers
Understanding what the average first-time buyer looks like, will help to see if you measure up to lenders for a first time home buyer mortgage. Did you know the average first-time buyer in Canada….
- Is between 20 and 29 years of age?
- Buys a home that is valued between $237,900 and $506,500, depending on which city or province they purchase in?
- Has saved approximately $50,000 or 16% for their down payment?
- Requires mortgage insurance, since their down payment is less than 20%
First Time Home Buyer Mortgage: Financial Support & Buying Delay Statistics
Approximately one-third to nearly 50% of all first-time home buyers receive financial help from relatives to buy their first home and 60% of people who plan to buy have to delay their purchase for one reason or another. Increases in real estate costs is one of the main reasons for buying delays.
If you find yourself falling below these Canadian averages, you can speak to a mortgage professional to discuss other down payment options that may be available to you, to ensure you are prepared for your purchase.
First Time Home Buyer: Other Statistics & Facts
Statistics and facts are vital when you are considering buying a new home. They help first-time buyers to be more certain about their purchase and arm you with the information you need to help you make an informed decision.
Did you also know:
- You are not alone! 86% of people want to own their own home too.
- Three-quarters of Canadians state mortgage brokers or specialist are very important resources to first-time buyers?
- Nearly 80% of first-time buyers choose fixed mortgage rates?
- Many first-time home buyers consider buying a house that is fully-detached, being re-sold, or newly constructed?
- One-fifth of new buyers purchase condos?
- One-fifth of buyers have immigrated to Canada?
- One-quarter of first-time buyers reside with family to save money to buy?
- Over 60% pay their credit cards on-time and in full every month and only 7% pay the minimum payment?
The Next Steps to a First Time Home Buyer Mortgage
Now that you have learned more about first-time buying, it’s time to start considering the next steps in the buying process:
(1) Discover Government Programs for First-Time Home Buyers
- First-Time Home Buyers’ Tax Credit (HBTC): Since January 27, 2009, first-time home buyers can be eligible for a non-refundable tax credit of up to $5,000.
- RRSPs Home Buyers’ Plan (HBP): This government program allows you to access funds (up to $25,000 a year) from your RRSPs. These funds can help you to buy a home or build a home that qualifies. Homes that would qualify under this plan are:
- Those being built
- Semi-detached
- Townhomes
- Mobile homes
- Condos
- Single-family homes
- Apartments in buildings, duplexes, triplexes, or fourplexes
- Housing units in co-operative housing, where you own shares and receive equity interest
- 5% Down Payment Program: Down payment rules in Canada have recently changed. As a first-time home buyer you are only required to come up with a $25,000 down payment on a home valued at $500,000. The portion over and above this amount will require a 10% down payment.
(2) Hire a Mortgage Broker
Now that you’ve taken a deep dive into all the programs offered by the Canadian government to assist you with the purchase of your first home, it is time to look for a qualified and experienced mortgage broker. Look for a broker that has your best interests in mind, and also has an excellent track record with other first-time buyers.
Consider AKAL Mortgages for your first-time buying needs. Call us today at (416) 621-1300 to speak with a professional from our team at AKAL Mortgages.
When we say YES! We stand behind our promise.