BC Home Owner Mortgage and Equity Partnership (BC HOME Partnership) assists residents of British Columbia who are eligible first-time homebuyers by providing repayable down payment assistance loans.
The length of time you agree to take to pay o your mortgage (usually 25 years).
Payment schedule: How often you make your mortgage payments. It can be weekly, every two weeks or once a month.
TYPES OF INTEREST RATES
• Fixed Rate : The rate doesn’t change for the term of the mortgage.
• Variable Rate : The interest rate uctuates with market rates.
The length of time that the options and interest rate you choose are in e ect. It can be anywhere from 6 months to 10 years. When the term is up, you can renegotiate your mortgage and choose the same or di erent options.
OPEN AND CLOSED MORTGAGES
Open mortgage : Lets you pay o your mortgage in full or in part at any time without any penalties.
Closed mortgage : Offers limited (or no) options to pay o your mortgage early in full or in part, but it usually has a lower interest rate.
CONVENTIONAL AND HIGH-RATIO MORTGAGES
• Conventional mortgage : A loan that is equal to or less than 80% of the lending value of a home. This requires a down payment of at least 20%.
• High-ratio mortgage : A loan that is over 80% of the lending value of a home. This means the down payment is less than 20% and will likely require mortgage loan insurance.
The ability to make extra payments, increase your payments or pay o your mortgage early without incurring a penalty.
An option that lets you transfer or switch your mortgage to another home with little or no penalty when you sell your existing home. Mortgage loan insurance can also be transferred to the new home.
A pre-qualification lets you know how much you can a ord, what your interest rate will be and what your monthly mortgage payments will look like. Getting pre-approved can help you narrow your search down to a speci c home type, size or neighbourhood. Getting pre-approved is not a guarantee of any approval for a mortgage. Once you nd the home you want to buy, the property still has to be evaluated to ensure the price and condition of the home are acceptable to your lender.
If you have less than 20% saved for a down payment, you’ll probably have to get mortgage loan insurance. It protects banks and other lenders against the risk of mortgage default, just like property insurance protects you in case of loss. CMHC is a provider of mortgage loan insurance.
Insurance premiums on mortgage loans are calculated as a percentage of your total loan amount. They’re based on factors including the size and source of your down payment.
In general, the smaller the down payment is, the higher the insurance premiums will be.
You can usually pay your mortgage loan insurance premiums up front or have them added to your mortgage loan. You may have to pay tax on the total amount of the premiums if your province charges sales tax.
Upfront cost of buying a property for first time home buyer in Vancouver
You will need to plan ahead to cover the many up-front costs of buying a home and before obtaining your mortgage in Vancouver.
It’s not a set number however, depending on where you live, closing costs will probably be between 1.5-4% of the purchase price of the property. We have highlighted some of the most important ones, due on the closing date.
Below is our TOP 10 List :
HOME INSPECTION It is advisable to make an offer on a home conditional on the outcome of an independent home inspection. A home inspector looks for items that could affect the price and desirability of a home, such as outdated wiring, shabby roofing, an old furnace or cracks in the foundation. The fee depends on the home's size, age and the amount of time it takes to do a thorough inspection. Approximate cost are $400 to 700.
APPRAISAL FEES An appraisal may be required to determine the market value of the property you are buying. If you are putting more than 20% down the appraisal is at your cost and they generally start at $350 and go up depending on the appraisal company, the size of the property and its location. For example, properties over 1800 square feet have a higher cost as well as acreages depending on the amount of land and where they are located.
INSURANCE COSTS INCLUDING PROPERTY INSURANCE, MORTGAGE LOAN INSURANCE, ETC.
LAND REGISTRATION FEE Most provinces charge a land transfer tax, payable by the purchaser, and the amount varies from province to province. This tax is based on the purchase price. In some provinces, first time home buyers who purchase a new home will receive a refund.
PREPAID PROPERTY TAXES AND UTILITY BILLS You May have to reimburse the seller for bills paid in advance.
LEGAL OR NOTARY FEES A lawyer or notary is vital to any home deal.They are drafting the title deed, preparing the mortgage documents, mediating with the seller's attorney, and transferring the land title and much more. Approximate cost $800 to 1,300.
POTENTIAL REPAIRS OR RENOVATIONS
GST/HST ON THE PURCHASE PRICE (FOR NEWLY BUILT HOMES) OR ON THE MORTGAGE LOAN INSURANCE (IF APPLICABLE)
These costs will vary depending on where you are purchasing your home. I will explain each of these costs to you in greater detail once we meet to help you manage your financial obligations.
To qualify for a full exemption, at the time the property is registered you must:
and the property must:
You may qualify for a partial exemption from the tax if the property:
has a fair market value less than: