As many of you know there are some great perks to being a first time buyer with the Home Buyer’s Plan (HBP), for example, borrowing up to $25,000 from your RSP without penalty.
Many however you may not know that you can be considered a first time buyer multiple times.
To be considered a first time buyer again under the Home Buyers’ Plan you (in addition to the standard requirements):
-at any period during the timeline beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the date of the withdrawal, you or your common law spouse must not have owned a home that you occupied alone or together while you were spouses or common-law partners
With that, if an acceptable amount of time has pasted since you have owned a home, you may be eligible to use the HBP again.
You must also have repaid any balance outstanding from your last Home Buyers’ Plan withdrawal, if applicable.
This plan can also be used for purchasing a home for a relative with a disability. Otherwise, the home must be an owner occupied home no later then one year after the purchase.
You have up to fifteen years to pay back the entire amount of the RSP funds used for the Home Buyers’ Plan and the full amount can be paid back at anytime.
Have a look at the January 2019 Market Statistics for Condominiums in Ottawa.
Members of the Ottawa Real Estate Board sold 209 condominium-class properties in January 2019, an increase of 20.8% from January 2018.
January unit sales are up almost 16%! This is the highest number of January sales we have seen in decades.
The average sale price for a condo in Ottawa was $283,990, an increase of 7.7% from January 2018. *
Between $175,000 to $274,999 remained the most prevalent price point in the condo market, accounting for 54.1% of the units sold.
Curious about January 2019 market statistics for residential class properties in Ottawa as well? Click here to read the full story.
*Average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.
An approval is based on the favourable combination of your current debts, income, credit score and more.
Once you are approved for a mortgage it is important that your finances stay constant and if there are potential changes to your financial situation, it’s important to review them with your mortgage professional first.
As some time can pass from when you are approved for a mortgage to when you close on your home purchase, many things can arise during that time, such as buying furniture for your new home, a new car, a new job opportunity, closing or consolidating debts, and so on.
Many lenders, when closing in over 120 days, will want updated documents at the 120-day mark and some will check your credit again 30 days prior to closing.
Here are Five Things to Avoid Once you are Approved for a Mortgage:
1. Having your credit pulled again by another bank or broker. If a lender checks your credit again prior to closing and sees that other brokers or banks have pulled your credit this could be seen by the lender as credit seeking and could jeopardize your approval.
Also, your credit score is an important part of the approval and there are minimum score amounts that need to be met. Each time your credit is pulled, it lowers your score.
2. Applying for more credit or spending large amounts on credit. The more debt you have the higher your debt to income ratio is. Lenders and mortgage insurers (ie CMHC) have strict maximums to these ratios and it’s important to have them in line.
3. Closing or consolidating debt. Not all debts are bad. They can help maintain or increase your credit score and show a history of favourable payments. Plus, many lenders and mortgage insurers will want to see at least two revolving credit items successfully being paid on time.
4. Moving funds around accounts or to/from other people. Having a paper trail of all the funds being used for the down payment is important. Lenders want to see a 90-day history of the funds used for the down payment and closing costs. If there are any large deposits such as cash deposits, e-transfers, wires, etc. a lender will want to see the history of those funds. Also, if lending funds to anyone or getting funds back that were lent to you, it’s important to have a paper trail for this.
5. Changing employers, roles within the same employer, or your type of employment. Have stable, secure, tenured employment is important. Moving to consulting, contract, self-employment, hourly and so on, this may affect your application.
For non-salaried employment, lenders will want to two years tenure and they will use an average income of these two years.
Also, lenders cannot use the income from an applicant that is currently on probation, so the probationary period would have to be completed before closing.
Real Estate in the 613 Has Never Looked Better – Ottawa is on Fire
No, Not literally. Although we can’t be blamed for seeing smoke emerging from the city’s hot housing market. It’s a great time to be in the 613. It’s an even greater time to buy a house within the boundaries of Canada’s great capital.
In the last couple of years, Toronto and Vancouver have been hellish for prospective homeowners. Soaring property prices in these two cities and hefty taxes mean most adults who live in either city can only dream of having a place they can call their own. Those who persevere are often priced out of the city and are forced to make long commutes to their businesses and families elsewhere.
Enter the Nations Capital
In comparison, Ottawa’s market seems like a calm oasis. And it keeps getting better. House and condo sales are on a steady rise, increasing year over year in the city. In 2017, there were 17,803 home sold. That’s a 10 percent increase. Condo sales also saw a 22 percent sales gain.
The fact that residents are scrambling to own their own homes in Ottawa is due to a myriad of factors.
Light rail has added the additional boost Ottawa needed to push the market up
What is Drawing Buyers In
While Ottawa does provide some of the big city life, it has managed to preserve the small town feel that makes people so comfortable settling down here. At the same time, the city is welcoming exciting changes like a new light rail system which will make it possible to reach opposite sides of town in under 30 minutes. Residents are also earning steady wages as a result of a booming economy, and big businesses that balk at Toronto’s eye-watering rent prices are setting up shop here.
It also means longtime Ottawa based corporations are expanding as a result of the economic stability they are enjoying. For instance, the online retail software company, Shopify, recently tripled the size of its Ottawa headquarters and major retailers like Tiffany and Nordstrom are planning major expansions in the downtown core.
Stability and Affordability
Although property sales in the city are increasing, the prices have remained relatively stable, meaning individuals who could not dream of owning homes in cities like Toronto and Vancouver actually have a chance to do so here.
25-year-old Alyssa spoke to us about her plans to own a house. Working a steady job, she says, “My partner and I are thinking about moving out. But we don’t want to rent anymore. We’ve been looking around for real estate to buy.”
Likewise, 22-year-old Maya is also encouraged by Ottawa’s housing prices and believes you’re never too young to be a homeowner. “I’ve been looking at houses in the Riverside area,” she tells us, “They’re fairly affordable and I have enough savings for a down payment. I think I’ll be buying a piece of real estate soon.”
With choices at every budget, the future looks bright
If you’re a prospective buyer with deeper pockets, Ottawa still has the home for you. With an astonishing number of millionaires living in the city, it’s no surprise that luxury properties in exclusive areas have sprung up to meet the demand. Individuals hoping to purchase homes valued at $1 million or more will find they’re spoiled with choice.
According to economists, Ottawa’s real estate market won’t be slowing down anytime soon. With a strong economy and steady prices, we’re bound to enjoy Ottawa’s steady growth for years to come.