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Updates on Canada’s First Time Home Buyer Incentive (2021)

Canada’s First Time Home Buyer Incentive (FTHBI) provides funding assistance and a down-payment assistance loan to middle-class homebuyers who have no experience availing their own property before. The program reduces monthly payments by decreasing the interest rate and extending the length of the mortgage. This allows first-time buyers to own homes with lower monthly payments than they could choose for themselves, and it also lowers property taxes by increasing the appraisal value.

The program is intended to level the playing field for first-time homeowners who could not otherwise afford it, allowing them to compete with other home buyers. It is expected to help at least 40,000 buyers over the coming years as it is designed to be long-lasting and sustainable.

The program was first launched in 2019 and has since garnered the support and inquiry of countless middle-class Canadians who are hoping to acquire their dream home without spending too much of their savings.

Eligibility

First Time Home Buyer Incentive was designed for first-time buyers who have no experience owning a residential property. Applicants must be 18 years of age or older and not be a member of a household that already owns a home in Canada.

They also need to be Canadian citizens or permanent residents. The property is expected to be purchased with funds from the applicant’s own resources or that of their spouse or common-law partner.

Buyers can be owner-occupiers or investors and must intend to occupy the property. It is expected that the applicants are not principal residence at the time of application too.

Keep in mind that applicants are not required to have a minimum amount of time in Canada, and they do not need to have been previously employed in Canada.

How To Apply

To apply for the program, the buyer must apply through a participating financial institution.

When applying, the buyer must provide the financial institution with several documents. These include:

  • A copy of the applicant’s birth certificate (if applicable),
  • A copy of their previous Canadian passport,
  • A copy of their previous Canadian citizenship certificate,
  • A copy of their previous Canadian Permanent Resident Card, or
  • Proof of Canadian citizenship or permanent residence.

Applicants must have their income tax returns certified by an authorized representative of the Canada Revenue Agency, Canada Border Services Agency, or Citizenship and Immigration Canada.

Some applicants may also require additional documentation such as a Social Insurance Number, and they must verify their identity with a valid Driver’s License or a piece of photo identification.

Another main requirement for the buyer, the first-time buyer’s spouse or common-law partner, and the first-time buyer’s co-applicant (if any) is to visit the financial institution together, as it is part of the primary application process.

The financial institution will fill out the necessary application forms to apply for the program, after which an application will be submitted to the local Canadian Mortgage and Housing Corporation office who will arrange for an appraisal.

Conclusion

Overall, these are just some of the most vital information about Canada’s First Time Home Buyer Incentive (FTHBI). If you happen to fit the eligibility criteria, feel free to inquire further about the other required paperwork. Not only will knowing them help you familiarize yourself with the appropriate deliverables, but you will also get a general idea of what to expect out of the process.

Be sure to know the essential details by heart, and you may just get that well-needed loan for your dream home in no time.

With that being said, if you are looking for the best mortgage specialist in Ottawa that would help you with your FTHBI, look no further than our expertise here at Ottawa Mortgage Services. We provide mortgage agent services for first-time homebuyers, self-employed individuals, and commercial clients. We also help with refinancing, pre-approvals, and debt consolidation. Contact us today and let us discuss all your available financing options.

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How a Mortgage Preapproval Insures You against Higher Rates

Fixed mortgage rates are continuously witnessing hikes from banks and lenders in the past months. Experts predict this to go on for the next years, but alarms are being raised for its potential to occur sooner than what has been expected. 

A mortgage preapproval may help you with this situation. In this article, we will discuss its importance amidst the rising mortgage rates. Read on. 

Interest Rates

The hike in interest rates heavily affects mortgage preapprovals. A mortgage preapproval gives you an estimate of the lender’s borrowing power and offers you an interest rate hold for a maximum of 120 days in most cases. When rates were either steady or declining, people did not pay much attention to their preapproval rates. However, this preapproval price has become a considerable factor in these times of rate hikes. 

A rate increase may favour you if you obtain preapproval for a fixed-rate mortgage. This is because your lender will honour the preapproval rate as long your mortgage funds remain valid during preapproval. 

Property buyers with preapproved fixed rates are able to complete their purchases more quickly and seamlessly compared to those with uninsured mortgages. 

Variable-Rate Mortgages

Getting preapproval for variable-rate mortgages can still be beneficial for you. Your rate will be expressed as a discount to your lender’s prime rate. 

Do not hesitate to take advantage of this option since variable-rate mortgages can be easily obtained these days. Although the payment will be affected by a change to the prime rate in most cases, there are also lenders that offer this type of mortgage that keeps the payment constant regardless of any change. 

This option ensures that you have enough cash flow until your renewal date and that more money can go to the interest instead of the principal when rates rise. Variable-rate mortgages are becoming more popular among home buyers and owners who are keen on maintaining their cash flows. 

The Benefits of Mortgage Preapproval

  • You can have protection against higher rates. If rates fall, you are still considered a free agent and benefit from the lower rates.
  • You are made aware of your borrowing power. This helps you be more prepared for expenses you may need to purchase a home.
  • Your credit will be checked for the process. This is not always done, so it’s best to ask your lender or mortgage agent. While this process does not guarantee approval, it is still an excellent opportunity to gauge if the numbers on your credit report match the property you are eyeing. After all, you do not want to be disappointed in the end when you find out you have been looking into a property that is beyond your budget. 

Conclusion

Not a lot of bankers and brokers offer mortgage preapprovals. They often view this process as a waste of effort and time since market rates can be tricky at varying times. 

However, a mortgage preapproval can bring tons of benefits to make your property purchase a success. This is why we recommend choosing agents who can help you with a mortgage preapproval, especially now that rates increase now and then. Having as many options as possible when purchasing a property is what you should aim for.

If you are on the lookout for mortgage services in Ottawa, turn to Ottawa Mortgage Services. We provide mortgage agent services for first-time homebuyers, self-employed individuals, and commercial clients. Apply now!

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5 Tips to Ensure Debt Consolidation Success

Whenever it seems like your personal finances are in the red, and you’ve accumulated a mountain of debt, one alternative you can turn to is consolidating your debt. By using debt consolidation to gain greater control of your debt, you can save yourself from complete bankruptcy. However, to pull this off properly, you need to know a few things to help you make better financial decisions. Here are some best practices on debt consolidation that you should consider following.

1. Understand the Impact of Debt Consolidation

Debt consolidation is an option where you combine your debt into a single payment. By doing this, your overall interest rate will be reduced, thereby reducing your overall costs. However, it is worth noting that you may also be vulnerable to interest rate hikes because you are now totally exposed to the whims of a single lender. If your lender increases your interest rate, then you will have no other option but to pay more every month.

2. Run the Numbers

When debt consolidation is in question, one of the first things you’d want to do is to run the numbers. Doing this will allow you to come up with a debt consolidation plan that can save you money. By running this simple calculation, you can make sure that you get the most out of debt consolidation. You can then use this to match the loan amount that you want. This will ensure that you get the most out of your debt consolidation and that your debt payments will be reduced.

3. Choose the Right Lender

There are a lot of debt consolidation options out there, and all of them will have different interest rates and terms. So choosing the right lender will be important. You should be able to check all the details of your loan package and make comparisons before settling for one. Most importantly, you should ensure that your lender is a reputable one. If possible, you should also check if your loan has any restrictions concerning debt settlement.

4. Know the Best Time to Consolidate Debt

One of the most important things you need to know when it comes to debt consolidation is when would be the best time to do it. This will ensure that you can have better control over your debt and that you can easily get out of a bad financial situation.

The best time to consolidate debt is when you need to buy a home, and you want to lower your mortgage. This will allow you to make your monthly payments more manageable and settle your debts at a lower interest rate. You will want to do this as soon as you get your mortgage approval letter, so you can have time to do this before the closing date.

5. Avoid the Trap

While debt consolidation can help you save money and improve your financial standing, it can also lead to something called debt entrapment. With debt entrapment, your situation will only worsen over time, and you will end up in a worse financial situation. This is because once you get into debt entrapment, you will have a harder time getting out of it.

Debt entrapment can happen when you constantly borrow money to pay off your debts. When you are in debt entrapment, you will only get deeper in debt, and you’ll struggle more while securing your financial situation and getting the life you want. So if you want to avoid this trap, then you should use debt consolidation sparingly, and you should only use it when you want to get out of a financial situation. If you use it appropriately, then you will find debt consolidation to be a useful tool in your financial arsenal.

Conclusion

Debt consolidation is an excellent way to improve your financial situation, provided that you know how to do it. By following the steps above, you can gain better control of your debt and achieve financial freedom.

If you’re looking for the best debt consolidation loans with reasonable payment and interest terms, Ottawa Mortgage Services is the one to trust. We help you deal with lenders and negotiate all aspects of mortgage underwriting. Work with Ottawa Mortgage Services today and get a free consultation and assessment!