Rick Howe: Updates to the first time home buyer incentives

Talking about first time home buyer incentives

Talking About Updates to the Federal First Time Home Buyer Incentives Don’t feel like listening? Check out the audio transcript below.

This is a five-minute business builder with Rick Howe, where your business comes first, on News 95.7.

Talking first time home buyer incentives updates

Rick: [00:00:08] Joining me this afternoon, another visit from senior mortgage adviser Clinton Wilkins Hello Clinton.

Clinton: [00:00:13] How are you doing today Rick?

Rick: [00:00:14] I’m doing great. How are you doing?

Clinton: [00:00:15] Thanks for having us.

Rick: [00:00:16] Running a little late I understand.

Clinton: [00:00:17] Well, it’s a beautiful day out there. I think everyone’s buying homes which is great.

Rick: [00:00:20] A lot of traffic out there.

Summer is a great time to think about homeownership

Clinton: [00:00:21] A lot of traffic out there which I think, you know, I think coming into the summer it’s a great time to think about homeownership. I think a lot of people are out looking and I think getting pre-approved is huge. And there’s been, you know, some news this week.

Rick: [00:00:32] What’s that?

Clinton: [00:00:33] Out from the federal government they’ve done some clarification around this homebuyer incentive.

Rick: [00:00:37] Yeah, because this was part of their budget?

Updates to the budget

Clinton: [00:00:39] Yeah, which is moving forward. And, you know, there’s certainly been some writing that’s come out this week around, you know, some of the changes that they’ve announced around the incentive. And basically what’s going to happen is in a new home they will give up to a 10 percent incentive. And on a resale home, they’re going to get 5 percent. Now you still need to have at least 5 percent of your own skin in the game for a down payment. But what really they’ve clarified on is that they’re going to own a percentage of the home.

Rick: [00:01:05] Oh OK. This is rather unusual?

Clinton: [00:01:08] It’s a little bit interesting and I think that you know, do you want the federal government in bed with you around your homeownership?

Rick: [00:01:15] But if it means getting a home?

Qualifying for a mortgage

Clinton: [00:01:17] I think you can get a home no matter, you know, the qualification is not going to be different if you’re going to put down 5 percent or if you go through and also get the additional five or 10 from the incentive the qualification is going to be the same. Overall it will reduce your mortgage payments because essentially you have to borrow a little bit less money. But, when you go to sell that home down the road you either need to pay off the incentive but they’re going to own a percentage of the home. So if that’s a house you know appreciates in value then the federal government’s going to make some profit.

Rick: [00:01:43] OK.

Clinton: [00:01:43] If the house goes down in value then maybe they’re going to take a little bit of a hit. Now it’s technically an interest-free product. So you’re not going to make payments towards this loan but they’re basically going to be in bed with that homeowner for the time that they own that property. So, you know, if the houses do appreciate you may be giving a part of your, you know, profit away to the federal government.

Rick: [00:02:03] Do you like this?

Who will this benefit?

Clinton: [00:02:05] I think overall in across the country that for Atlantic Canada and the prairies I think we’re going to see the most benefit from it. I think it’s going to be a little bit restrictive for people that are in Ontario and BC because really it limits it to about a 500-thousand dollar house purchase. But we know in Halifax right now the average house prices you know in the 300-thousand dollar range.

Rick: [00:02:23] So it will be a lot easier here. But again this is all designed to try to encourage more Canadians to be first-time homebuyers.

Pre-approvals?

Clinton: [00:02:31] And I think that homeownership is part of the Canadian dream. You know that’s something we keep on saying and I think that you know, it’s really in our roots homeownership and it is available here in Halifax and Atlantic Canada. It’s realistic. And I think that you know, seeking the advice of an unbiased mortgage professional. Does this new home buyer incentive make sense for you when it rolls out in the fall? Does it not? I think looking at the pros and cons are great.

I’m pre-approving people every single day. Some people are asking should we wait for the incentive. I mean, I think that’s a personal decision. You know, in terms of qualifying we’re going to qualify you the same way if you want to use the incentive or not use the incentive. For me, I think having your own skin in the game is going to be the best. You know, I think that if you want to make the profit I think then you should, you know, go in on it on your own. But if you really want to try to reduce your carrying costs and you’re OK to share the profits with the federal government down the road then you should take advantage of the program.

Is it the right time to buy?

Rick: [00:03:26] Summertime is it typically a good time of the year to buy and sell homes?

Clinton: [00:03:28] I want to say that, you know, spring and summer is typically the busiest time and I know right now the biggest opportunity in the market is there’s not a lot of inventory out there. So I think if you own a home and you want to sell it now is a great time to get it listed and I think that, you know, we’re pretty proofing people every single day and they’re looking for homes so if you want to sell I think now is a great time I think we’re more in a seller’s market and people ask me the like well should I wait for it to be a buyer’s market again.

Growth in Halifax

That might not happen for quite some time it might never happen. We don’t know, in Halifax, we’ve had a very steady market over the last you know as long as I’ve done this for 13 years and even looking back you know the stats are that in Halifax the price growth has been about 1 to 3 percent of it’s been flat. We’ve not seen a decrease in Halifax but neither have we seen a boom. And I think there’s a lot of writing out there in the news and in the media that Halifax is boomtown and we’re pretty excited to be here and pretty excited to help Canadians.

Rick: [00:04:20] Good stuff. Good to hear from you again Clinton.

Clinton: [00:04:22] Yeah. Thanks for having me Rick and we’re going to be back on Saturday with Todd. Yeah, we thought at 10:00 a.m. you can certainly call in and we can ask any questions that you want and we’ll be talking a little bit more about first-time homebuyers and the incentive.

Rick: [00:04:32] Senior mortgage adviser Clinton Wilkins with us here today.

If you have any questions about First Time Home Buyer Incentives, get in touch with us here.