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First time home buyers: What you need to know

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CVCU is here to help you save for your first home. 

Who can be considered a first-time home buyer? 

You are considered a first-time home buyer if, in the four-year period prior to your home purchase, you did not occupy a home that you owned, or one that your current spouse or common-law partner owned. 

Saving for your down payment: What are your options? 
  • Your down payment can be as little as 5%. 
  • Cash: you must disclose the source of funds (accrued savings, sales of an asset, inheritance, etc.) 
  • Non-repayable financial gift 
  • Borrowed funds, such an as line of credit, may be considered.  
  • Home Buyers’ Plan (HBP) to withdraw funds from your RRSPs 
  • Withdraw money from your RRSP to buy or build a qualifying home for yourself or a related person with a disability. 
  • A maximum of $35,000 can be withdrawn. 
  • You must pay back the withdrawn funds within a 15-year period.  
  • To be eligible, you must be: a first-time home buyer; a Canadian resident; have a valid Social Insurance Number; 18 years or older 
  • First Home Savings Account (FHSA) 
  • Invest your money, grow it tax-free, withdraw when you buy your first home. 
  • Qualified withdrawals to buy a home are not taxed. 
  • Contributions to your FHSA can be used as deductions against your income, possibly lowering the amount of income tax you pay. 
  • Investment earnings are not taxed.  
  • Your FHSA can stay open for 15 years or until the end of the year you turn 71, or at the end of the year after your withdrawal – whatever comes first. 
  • If you don’t buy a home, the money can be transferred to an RRSP or RRIF without paying tax. 
  • Contribute up to $8,000 to your FHSA each year up to a lifetime contribution limit of $40,000. 
  • Once your FHSA is opened, you can carry forward up to $8,000 per year in unused contributions, subject to the lifetime limit. 
  • To be eligible, you must be: a Canadian resident; have a valid Social Insurance Number; 18 years or older; and you are planning to buy your first home 

Your First Mortgage
  • An open or closed mortgage refers to whether there would be a penalty for paying off the mortgage early. 
  • Length of term refers to how long the interest rate is locked in.  
  • Amortization refers to the number of years it will take to repay your mortgage. 
  • Insured vs conventional mortgage is determined by the amount of the down payment. 
  • Life, disability, critical illness and loss of employment insurance are available. 
  • Payments can be monthly, biweekly or weekly. 
  • A payment plan for property taxes should be set up for budgeting purposes. 
  • Heat and taxes are included in the qualifying calculation for your mortgage. Taxes vary whether the home is in Area A or within Town limits. 
  • Borrowers are required to obtain fire insurance. The insurance company may require upgrades that weren’t planned. Some areas outside of fire protection have higher insurance costs.  
  • It is possible to apply for renovation funds as a ‘purchase + improvements’ loan. 
  • Additional expenses to consider: 
  • Legal fees 
  • Prorated property taxes 
  • Property transfer tax (if you are not a first-time home buyer) 
  • Cost to transfer utilities 
  • Appraisal fees 
  • Possible inspection fee 

CVCU is ready to help you.

If you’d like to learn more, if you are ready to start saving for a down payment, or if you are ready to apply for a mortgage, please contact one of our team members: 

Tawnia Jobin 

Bonny MacLeod 


Want to learn more?

To understand how CVCU can help you, get in touch.
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