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Financing Options for First Time Homebuyers in Brampton

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Buying your first home is an exciting and stressful time even if you have been pre-approved for a mortgage. After all, buying a home is one of the most expensive purchases the average person will make in their lifetime. There are several costs that go into buying your first home beyond just the down payment. Thankfully, there are several financing options for first time homebuyers in Brampton. Homebuyers can shop around for several different types of mortgages, choosing between fixed and variable rates to find the terms that work best for them.
In addition to banks and private lenders, the government of Canada also offers assistance to first time homebuyers. The Home Buyers’ Plan allows up to twenty five thousand dollars to be borrowed from your RRSP tax free to fund the purchase of your first home. First time homebuyers are also eligible to receive a Home Buyers Tax Credit on their annual tax return, as well as a land transfer tax refund to help ease the financial burdens of owning a home. The first-time home buyers land transfer tax rebate was recently doubled to four thousand dollars, providing further incentive for people to get into the real estate market.
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Financing Options for First Time Homebuyers in Brampton

There are open and closed mortgages, as well as fixed and variable rate mortgages that all come with different terms and prepayment options. Below, we’ll give prospective homeowners a brief overview of what they need to know before shopping around for mortgage rates in Ontario.
 
Open Mortgage vs. Closed Mortgage
These two types of mortgages vary in their prepayment options. In an open mortgage, a homeowner has the ability to pay down as much of the principal as they decide during any given year, where as in a closed mortgage, the amount by which a prepayment is available is restricted and interest penalties are enforced on any overpayment. However, many people choose a closed mortgage because they typically have lower rates, which can be either fixed or variable.

Fixed Rate vs. Variable Rate
Fixed rate mortgages have set rates that stay constant for the term of the mortgage, resulting in a consistent mortgage payment for the mortgage term. While variable rates tend to be lower, variable rate mortgages are tied to the market prime rate and are subject to change over the course of the mortgage.

 

There are a number of programs and financing options available to first time homebuyers in Brampton, which can make the process of buying a new home feel like a daunting task. Enlist the help of a local REALTOR® to help understand your options a little bit more!