First Time Buyers... We Can Help
So what exactly is a mortgage?
- A mortgage is a loan that uses the home you buy as security. This loan is registered as a legal document against the title of your property.
- The principal is the amount of the loan that is actually borrowed.
- The interest is the amount the lender charges for the use of funds borrowed. Interest rates vary according to a number of factors including terms and conditions of the mortgage and the borrower's credit history. Mortgage payments are usually comprised of both principal and interest.
- The amortization period is the number of years that it will take to repay the entire mortgage loan in full. A longer amortization period will result in lower payments but will take longer to pay off the loan which means you will pay more in interest.
- Maximum amortization for insured mortgages is 25 years.
- Maximum amortization for conventional mortgages is 30-35 years.
- The term is the length of time for which a mortgage agreement exists between you and your lender. A longer term means you will keep the interest rate agreed upon for a longer length of time. Rates and therefore payments vary with the length of the term. Terms usually range from 1-10 years with a five-year term being the most common. Generally a longer term, because of the added security, will be at a higher rate than a shorter term.
- The maturity date marks the end of the term, when you can repay the balance of the principal or renegotiate the mortgage at interest rates in effect at that time. If you choose to repay or renegotiate the mortgage before this time, penalties may be charged. Once your mortgage matures you are free to renew with your current lender or shop around to other lenders for the best rate.
- The payment schedule is the frequency at which you will make your mortgage payments. These can occur monthly, semi-monthly (twice a month), bi-weekly (every other week) or weekly.
A few words from some of our First Time home buyers!"Tracy and Neal did an excellent job of listening to and understanding what we were looking for. We felt confident in their judgment and they helped us to find and negotiate for a home we are thrilled with!"
Emily & Robin
First Time Olympic Village Condo Buyer
"Tracy helped to make the experience of purchasing my first home very positive, stress-free, and fun. She truly listened to who I am and what I was looking for in a home and she was able to find a variety of places for me to look at that might meet my requirements. I appreciated her patience and encouragement throughout this process. Though I'm just getting settled I know that when it comes time to sell, I'll work with Tracy again."
- Charlotte D.
First Time East Vancouver Condo Buyer
Advantages of Home Ownership
- Home ownership is the single largest source of savings for Canadian households.
- Your payments build equity (as opposed to renting, where your money goes to the building owner).
- Unlike other investments that can be volatile, when you buy a home the increase in its value is relatively steady.
- You can use the equity in your home as security for other loans once a certain percentage of equity has been established.
- Buying a home and building equity is the first step on the property ladder. It gets you into the housing market, keeps you in touch with increasing house prices, and puts you in a good position to trade up to bigger and better homes as your circumstances allow.
Property Transfer Tax UpdateFebruary 16, 2016
Tax Rate ChangesAfter February 16, 2016, the property transfer tax rate is 1% on the first $200,000 and 2% of the balance up to $2,000,000 or less.If your property has a market value greater than $2,000,000 the tax rate is 3% of the purchase price or fair market value.Newly Built Home Exemption
To qualify for the new home exemption the property (land and improvement) must be registered at the land title office after February 16, 2016 and meet the following requirements:You must be an individual and a Canadian citizen or permanent resident, the property must be located in B.C
The property may only be used as your principal residence and have a purchase price / fair market value of $750,000 or less.
You must move into your new home within 92 days of the after the property was registered and you must
occupy the property as your main residence for the first year.
You may qualify for a partial exemption, if the property has a fair market value greater than $750,000 and less than $800,000