2 Sep

The Benefit of Rate Holds

Mortgage Tips

Posted by: Elena Bogomaz

Purchasing your first home is an exciting and rewarding experience. To make the mortgage process smoother, consider getting pre-approved for your mortgage.

What is a Rate Hold?

When you get pre-approved, you secure a fixed interest rate for 90 to 120 days. This doesn’t lock you into a specific lender but protects you from potential rate increases while you shop.

Key Advantages of Rate Holds

1. Protection from Rate Increases

A rate hold ensures you receive a guaranteed interest rate for up to 120 days. This shields you from potential rate hikes. If rates drop during this period, you can still benefit from the lower rate.

2. Enhanced Financial Planning

Knowing your exact rate helps with budgeting and financial planning. It provides clarity on your monthly payments and helps you find a home within your price range. As a result, you can ensure future financial stability.

3. More Time to Shop

A rate hold offers peace of mind, allowing you more time to shop for the right home without worrying about fluctuating rates. You can explore different mortgage options and lenders without feeling rushed.

4. Stress Reduction

Rate holds alleviate stress from market uncertainties and rate fluctuations. After recent market turbulence, having a secured rate reduces pressure. If your rate hold expires, applying for a new one is simple.

5. Securing a Competitive Rate

While current interest rate increases are unlikely, securing a favorable rate now can save you money in the long run. Locking in a good rate can be beneficial if market conditions change.

Summary

Rate holds offer peace of mind, financial security, and the ability to make informed decisions when entering a mortgage agreement. They are particularly useful in fluctuating interest rate environments or when delays in finalizing a mortgage are expected.

Contact Us for More Information

If you’re looking to buy a home or need more details about rate holds and the mortgage process, contact Elena at 647-945-3681 today.

15 Aug

A Comprehensive Guide for First-Time Buyers in Canada

Mortgage Tips

Posted by: Elena Bogomaz

First Time Home Buyer Guide- 2024

A Comprehensive Guide for First-Time Homebuyers in Canada: Key Programs and Strategies for 2024

Buying your first home is a significant milestone. It can also be a challenge, especially in Canada’s competitive housing market. Thankfully, several programs are available in 2024 to help first-time buyers. This guide covers essential programs and strategies to help you succeed.

While the First-Time Home Buyer Incentive (FTHBI) has been discontinued as of 2024, several valuable programs remain available to help you achieve your dream of homeownership in Canada.

Home Buyers’ Plan (HBP)

How It Works:

  • You can withdraw up to $60,000 from your RRSP tax-free.
  • If you buy with a partner, you can combine withdrawals for up to $120,000.
  • You have 15 years to repay the money, interest-free.

Why It Matters: This plan allows you to use your retirement savings without penalties. Therefore, it makes affording a down payment easier.

First-Time Home Buyers’ Tax Credit (HBTC)

Tax Relief:

  • You can claim up to $1,500 in federal tax savings.
  • This credit reduces your tax bill for the year you buy your home.

Eligibility: You and your partner can share this credit. However, the total cannot exceed $1,500. This credit eases the financial burden in your first year of homeownership.

HST & GST Housing Rebate in Ontario

Federal and Provincial Rebates:

  • You can recover some GST/HST paid on new or renovated homes.
  • The federal rebate applies to homes priced under $450,000.
  • Ontario offers a rebate of up to $24,000, even for higher-priced homes.

Eligibility Criteria:

  • The home must be new or substantially renovated, bought from a builder, and located in Ontario.
  • You must use the home as your primary residence. Additionally, it must be unoccupied before you take possession.

Impact: These rebates significantly reduce the tax burden on new homes. As a result, buying a home becomes more affordable.

Ontario Land Transfer Tax Refund

Available Refunds:

  • You can receive up to $4,000 on the provincial land transfer tax.
  • In Toronto, you can get an additional $4,475.

Who Qualifies:

  • You must be a Canadian citizen or permanent resident.
  • You need to occupy the home as your principal residence within nine months of the purchase.

Why It’s Helpful: This refund can offset a large portion of your closing costs. This is especially valuable in high-tax areas like Toronto.

First-Time Home Savings Account (FHSA)

Saving Strategy:

  • You can contribute up to $8,000 per year, with a lifetime maximum of $40,000.
  • Contributions are tax-deductible. Moreover, withdrawals for home purchases are tax-free.

Advantages: Using both the FHSA and RRSP can increase your down payment. Consequently, you can secure a better mortgage.

New 30-Year Amortization for New Builds

Policy Change:

  • Starting August 2024, first-time buyers can choose a 30-year amortization for new builds.
  • This option lowers monthly payments but increases total interest.

Considerations: While this option makes monthly payments more manageable, it also increases the long-term cost due to higher interest.

Smart Strategies for Ontario’s First-Time Buyers

Maximize Your Savings:

  • Use both the FHSA and RRSP (via HBP) to increase your down payment.

Focus on Credit Score:

  • Aim for a credit score of 680 or higher to access better mortgage rates.

Get Pre-Approved:

  • A pre-approval helps you understand your budget. It also strengthens your offer in a competitive market.

Plan for Closing Costs:

  • Budget for closing costs, typically ranging from 1.5% to 3% of the purchase price.

Seek Professional Advice:

  • Work with an experienced realtor to navigate the complexities of buying your first home.

Think Long-Term:

  • Consider the potential for appreciation and resale value when choosing a home.

Conclusion

Buying your first home in Canada can seem daunting. However, with the right programs and strategies, it’s achievable. Take advantage of these opportunities. Consult professionals, and plan carefully. Your dream of homeownership is within reach.

Final Tip: Stay updated on any changes to these programs. As government policies evolve, informed decisions today will lay a strong foundation for your future.

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12 Jul

Beware of Car Payment Trap

Mortgage Tips

Posted by: Elena Bogomaz

Hey, future homeowners!  Ever wondered how that flashy car in your driveway could impact your dream home purchase. Buckle up because I have a financial twist that might actually reshape your home-buying journey.

Reduced Borrowing Power: Higher monthly debts mean less money available for your mortgage. In fact, for every $100 in monthly debts, your buying power can drop by up to $10,000. That $700 monthly car payment could reduce your home-buying power by $70,000 to $100,000.

So, what’s the takeaway? Before you rush to the dealership, hit the brakes and think about the bigger picture. Your dream home might be within reach, but that car payment could be a major roadblock.

Remember, every financial decision today impacts your homeownership dreams tomorrow.

I would be happy to answer any mortgage related questions. Please email elenab.mortgages@gmail.com or DM (647-945-3681) for personalized advice! Let’s make your homeownership journey a winning one.

Click here to book a Mortgage Discussion with Elena.

#HomeBuyingTips #SmartFinancialMoves #DebtManagement #DreamHomeJourney