More than ever owning a home is affordable

(September 16, 2014 )


More than ever owning a home on the Sunshine Coast is becoming affordable. A few years ago it was unheard of to see detached homes selling on the Sunshine Coast below $300,000. One of my colleagues was shocked to see home many detached homes are for sale below $300,000 combine that with record low interest rates equals affordable. Now you need to stop dreaming of owning a home and create a plan of action.

Lack the resources for a down payment and closing costs. Here are tips for securing that down payment.

1) Borrow from your retirement account: The Home Buyers’ Plan (HBP) is a program that allows you to withdraw funds from your registered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself. You can withdraw up to $25,000 in a calendar year and you can repay it over 15 years. Repayment will not start till the 2 nd year.

2) Ask family: Sure, you may be too proud to ask for money, but if relatives can help you and your family move into that dream home, isn’t it worth it? If you do get help from a family member, the lender will ask you to sign a gift-letter form, attesting to the relationship. The lender may also require your relatives to explain where they got the money and prove that they are financially able to make such a gift.

3) Property Transfer Tax Credit Introduced in 1994, the First Time Home Buyers’ Program is designed to help British Columbians purchase their first home. Under the program, eligible purchasers can claim an exemption from Property Transfer Tax if the fair market value of the home is less than the threshold amount.

4) Add it to the wedding registry: Several mortgage companies allow those getting married to set up a down payment registry. This is a great way to celebrate the joining of two people in matrimony.

5) Cut back and save: If none of the other ways will work for you, there’s always the old fashioned “saving for a rainy day.” Try putting aside 10% of each paycheck and make your meals instead of going out for them. If you’re married, save the money you would spend on birthday, anniversary, poker games and cut back on Christmas presents and put it toward your house. You also may need to forget that vacation this year. These sacrifices may seem significant but they will be worth it once you’re inside your own home. Your home on the Sunshine Coast is the best investment you will make.

6) Come to a lease/purchase agreement: Homeowners who can’t sell their homes in this market may consider a lease/purchase agreement, where you rent the home you want to buy and a percentage of your rent is applied toward the down payment. If you go this route, make sure you get a contract outlining all the details so both parties are protected.

For more help contact your Realtor or a Mortgage broker and remember home prices will not stay at these levels for ever. If you wait for the bottom, you will be buying on the way up.

– Kenan