If you are in the market for your first home, the B.C. government just announced what is likely stellar news for you. A new loan program makes it easier for first-time buyers to make their down payments or to increase them, reducing the principal they own on their home.
The program is funded by revenues generated from the newly instated foreign buyer property transfer tax, which has generated a windfall budget surplus currently being used to aid development and housing programs.
Eligible applicants to the new loan program will receive up to $37,500 in matched funds from a 25-year loan that charges no interest and requires no payment for the first five years. The program only applies to those who live in the province, have limited income and meet other requirements, but it is nevertheless a boon for both the real estate industry and those seeking to own their first home.
Expect listings on the MLS Maple Ridge to be a lot more active in the next coming months as people take advantage of the generous loans.
How the New B.C. First-Time Buyer Loan Program Works
In order to provide maximum effectiveness and avoid unintended consequences, applicants for the new loan program must meet a number of certain criteria. In order to qualify, owners have to:
- Have been Canadian citizens or permanent residents for at least the past five years and lived in B.C. for at least the past year
- Have a combined gross household income less than $150,000 or equal to it
- Qualify for a mortgage on a B.C. property worth $750,000 or less
- Make a down payment on the home, of which the loan can match up to $37,500 in funds
Under this program, someone could purchase a $600,000 home with a required $60,000 down payment and only have to put up the cash for half of it. Or, they could contribute as much as possible, take the maximum $37,500 loan amount and put it towards a bigger down payment, reducing the principal they owe. As the principal goes down, so, too, can the monthly payment amount as well as the overall amount paid to interest over the life of the mortgage.
How the New Loan Program Could Affect MLS Maple Ridge Listings
According to B.C. Premier Christy Clark and Maple Ridge news, the goal of the program was to, “make sure that it is easier for first time homebuyers to find their way into a really tough market.”
For those buying a home in Maple Ridge, this benefit means that they can have some extra help when trying to get into a home that meets the loan program criteria. For those selling a home in Maple Ridge that meets the $750,000 threshold, the program can open opportunities among first-time buyer clients.
Either party can utilize our expertise in order to gain the most benefit from the new, generous loan program. You can contact us today for related buying and selling strategies.