If you are looking for information on how to buy a house in BC Canada, you may want to read this article.
In this article, you will learn about the First-Time Home Buyer Incentive, Mortgage insurance, and the exemptions from property transfer taxes.
Obtaining a mortgage pre-approval is also a good idea, especially if you plan on buying a property for investment. Before you buy, make sure you understand the eviction process in BC Canada.
1. First-Time Home Buyer Incentive
The First-Time Home Buyer Incentive is a government grant for first-time home buyers in BC. The government will provide either 5% or 10% of the home’s value to help buyers pay down their mortgage faster.
This grant will also boost a down payment, allowing buyers to borrow less money. This will help them make smaller monthly payments, but they will eventually have to repay the government.
The program helps people buy a home without spending a fortune.
Let’s say you are looking for houses for sale in Abbotsford and in the case of a $400,000 home, the first-time buyer can enjoy a partial exemption on property transfer taxes.
The exemption will cover a portion of the property transfer tax, and if the house is worth less than $750,000, the buyer will pay just $13,000 in taxes. The full exemption will be available to buyers with down payments under $400,000, but the program does not apply to homes priced over $800,000.
2. Mortgage Insurance
The Bank of Canada posts its conventional five-year fixed mortgage rate every week on its website. These rates are generally higher than the contract mortgage rate and will affect the interest rate you will pay over the life of your loan.
In September 2016, the posted rate was 4.64 percent. To determine whether you’ll need mortgage insurance, you should know the down payment requirements for your property type.
Once you know what you can afford, you can begin comparing different plans and insurance providers to determine which ones will meet your needs.
Although mortgage insurance is not compulsory, it can help buyers qualify for a mortgage that requires less than a 20% down payment.
The premium for mortgage insurance ranges from 0.6% to 4.50% of the mortgage amount. You can either pay it all at once or add it to your monthly mortgage payments.
It’s important to remember that some buyers may not qualify for mortgage insurance based on the price of the property and their other debts.
3. Property transfer tax exemptions
If you’re planning to buy a house in British Columbia, you should be aware of the property transfer tax exemptions available. The first of these is the First Time Home Buyer’s Program.
This program reduces or even eliminates property transfer tax. Depending on the property’s fair market value, you may be exempted from paying the tax entirely. However, if the house you’re buying is worth under $400k, you’ll still owe the tax.
The first-time buyer’s program in British Columbia helps first-time buyers avoid paying property transfer tax (PTT). It is also a great way to get your new home without spending a fortune on renovations.
You’ll be able to buy a new home without paying PTT, and you’ll get the added benefit of a family exemption. Foreign nationals may have to pay additional property tax on their new home.
4. Getting a mortgage pre-approval
Getting a mortgage pre-approval is an important part of the home buying process, as it helps you determine your budget and narrow down your choices.
The pre-approval process also saves you time and stress during the subject removal process. You can prepare the necessary documents ahead of time so that you don’t have to go through them again later.
Listed below are the basics of getting a mortgage pre-approval before buying a house in BC Canada.
Obtaining a site survey is essential. Site surveys are documents that detail the location of the property on the land and show whether the house is aligned with neighboring properties. Lenders often require site surveys as proof of ownership.
Finally, you should purchase title insurance to protect yourself from possible property problems. Once you have obtained these documents, you can start the process of buying a house.