Lower downpayments will help a lot of people get their first homes, according to a Halifax real estate agent.
The province’s new first-time buyers program gives people the chance to buy their first house with a downpayment of 2 per cent instead of 5.
Keith Mitchell with Royal LePage says this will be a huge help.
“They may be able to shave off a year or two years of savings and get into the home and start building that equity,” says Mitchell.
The program applies to homes worth up to $570,000 in HRM and East Hants and $500,000 for everywhere else.
To qualify, you must meet the following criteria:
– have a household income of $200,000 or less
– pass the Canada Mortgage and Housing Corp. stress test to determine the maximum mortgage they can carry
– have a credit score of 630 or higher
– be a Canadian citizen, permanent resident or an immigrant with a sponsorship letter from the Nova Scotia provincial immigration program.
If you have not owned a home in the last four years, you may also be eligible.
Credit Union Atlantic also says it is opening doors for more people.
They explain that, if you use the program, you do not need to get mortgage insurance, which is normally required when the downpayment is less than 20 per cent. That means “more of your money stays in your pocket,” the website says.
Mitchell says that downpayment is typically the most difficult thing to overcome for first-time homebuyers.
But, he adds, home prices increase every year. So as they go up, you may be only $5000 away from affording that downpayment in January, but by the next year, you will need another $1000 or so.
“That’s where I think it’s going to really be an advantage for first-time home buyers,” he says.
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