First-time Homebuyer’s Guide: Everything You Need to Know About Buying Your First Home in Calgary

Are you a first-time home buyer in Calgary? Congratulations! Buying your first home is an exciting milestone, but it can also be a daunting process. With the right knowledge and guidance, however, you can navigate the Calgary real estate market with confidence. In this comprehensive guide, we will walk you through everything you need to know about buying a house in Calgary as a first-time buyer. From understanding the definition of a first-time home buyer to exploring the laws and incentives available in Calgary, we've got you covered.

What is Considered a First-Time Home Buyer?

Before we delve into the specifics, let's clarify what it means to be a first-time home buyer in Calgary. Generally, a first-time home buyer is someone who has never owned or had an interest in a home anywhere in the world. However, it's essential to note that the definition may vary depending on the programs and incentives you're considering. Understanding your eligibility as a first-time home buyer will help you determine the options available to you.

What to Look for as a First-Time Home Buyer

As a first-time home buyer, it's crucial to consider various factors when searching for your dream home in Calgary. Here are some key aspects to keep in mind:

• • Location: Determine the neighborhood or area that suits your lifestyle preferences, such as proximity to schools, amenities, transportation, and work.
  • Budget: Set a realistic budget for your home purchase, considering not only the purchase price but also ongoing expenses like property taxes, utilities, and maintenance.
  • Home Size and Layout: Consider your current and future space needs. Think about the number of bedrooms, bathrooms, and overall square footage that would accommodate your lifestyle.
  • Condition of the Property: Evaluate the condition of the house, including structural integrity, plumbing, electrical systems, and any potential maintenance or renovation needs.
  • Resale Potential: Although you may be buying your first home, it's essential to consider the potential resale value. Look for properties in desirable neighborhoods and with features that appeal to a broad range of buyers.

Laws and Incentives for First-Time Home Buyers in Calgary

Calgary offers several laws and incentives specifically designed to support first-time home buyers. These programs aim to make homeownership more accessible and affordable. Let's explore some of the most notable options available in Calgary:

First-Time Home Buyers' Incentive Program

The First-Time Home Buyers' Incentive Program is a federal initiative that provides financial assistance to first-time home buyers. Through this program, eligible buyers can borrow either 5% or 10% of a home's purchase price from the government, which can be used as a down payment. The government then shares in the home's equity, either gaining or losing value depending on the property's appreciation or depreciation.

To take advantage of this program, you must meet the government's definition of a first-time home buyer and have a household income within the specified limits. It's important to note that the program has certain conditions and repayment requirements, so be sure to thoroughly understand the terms before participating.

First-Time Home Buyers' Tax Credit

The First-Time Home Buyers' Tax Credit is a non-refundable credit of $10,000 for first-time home buyers in Canada. This credit provides a tax rebate of up to $1,500, making the first year of homeownership more affordable.

To qualify for this tax credit, you must meet the government's definition of a first-time home buyer and have purchased a qualifying home in the tax year. Be sure to consult with a tax professional or refer to the government's guidelines for further details.

Calgary First-Time Home Buyer Programs

In addition to federal programs, Calgary offers its own incentives to support first-time home buyers. These programs aim to address the unique challenges faced by home buyers in the city. Here are some notable programs:

Attainable Homes Calgary

Attainable Homes Calgary (AHC) provides loans to help first-time home buyers with their down payments. By contributing $2,000 upfront, AHC will lend you the remaining amount to reach 5% of the purchase price of a home. However, there are some important details to consider:

• • AHC is designed for low- to middle-income Calgarians, with specific income limits.
  • The program operates on a shared equity arrangement, meaning you'll share any appreciation in the home's value with AHC.
  • You must purchase a property offered by AHC to participate in the program.

While AHC may not be the ideal solution for everyone, it can be a valuable option for those struggling to save a down payment.

First Place Home Ownership Program

The First Place Home Ownership Program in Edmonton aims to transform surplus school sites into townhouse developments for first-time home buyers. The properties are sold at market prices, and the program offers a 5-year deferral on the land portion of the mortgage. However, there are specific eligibility criteria and requirements, such as income limits and residency obligations, so be sure to review the program's details before applying.

FHSA: First-Home Savings Account

A First-Home Savings Account (FHSA) is a specialized savings account designed to help first-time home buyers save for their down payment. The FHSA allows individuals to deposit funds into the account, which can then be invested to grow tax-free. Withdrawals from the FHSA can be used towards the purchase of a qualifying home.

To open an FHSA, you'll need to choose a financial institution that offers this type of account. Several institutions, including Questrade, RBC, National Bank of Canada, Fidelity Investments, and EQ Bank, have launched their FHSAs. Ensure you understand the terms, contribution limits, and investment options available with each institution.

How to Take Advantage of Calgary's Laws and Incentives

Now that you're familiar with the laws and incentives available for first-time home buyers in Calgary, let's explore how you can make the most of these opportunities:

• • Research and Educate Yourself: Take the time to understand the various programs, eligibility requirements, and application processes. Researching and educating yourself about the available options will empower you to make informed decisions.
  • Consult with Professionals: Seek guidance from professionals who specialize in real estate and financial planning. Mortgage brokers, real estate agents, and financial advisors can provide valuable insights tailored to your specific circumstances.
  • Create a Realistic Budget: Assess your financial situation and create a realistic budget for your home purchase. Consider not only the down payment but also ongoing expenses such as mortgage payments, property taxes, utilities, and maintenance costs.
  • Explore Multiple Financing Options: Don't limit yourself to a single financing option. Investigate different mortgage lenders, compare interest rates, and understand the terms and conditions of each loan. This will help you find the best financing option for your needs.
  • Attend Homebuyer Education Programs: Many organizations offer homebuyer education programs designed to provide valuable information and resources. These programs cover topics such as budgeting, mortgage options, home inspections, and legal considerations.
  • Work with a Knowledgeable Real Estate Agent: Engage the services of a reputable real estate agent who has experience working with first-time home buyers. They can guide you through the entire home buying process, from property search to closing the deal.
  • Stay Informed About the Market: Keep a close eye on the Calgary real estate market. Stay informed about market trends, inventory levels, and pricing to make well-informed decisions.
  • Take Advantage of Home Inspections: Before finalizing your purchase, invest in a professional home inspection. This will help you identify any potential issues or hidden problems with the property, allowing you to make an informed decision.
  • Network and Seek Advice: Connect with other first-time home buyers and seek their advice and insights. Networking with individuals who have gone through the process can provide valuable tips and support.
  • Be Patient and Persistent: Buying a home is a significant decision that may take time. Be patient, persistent, and flexible throughout the process. Don't settle for a property that doesn't meet your needs or feels like a compromise.

Helpful Information for First-Time Home Buyers

As a first-time home buyer, having access to helpful information can make a significant difference in your buying journey. Here are some additional tips and resources to support you:

• Mortgage Pre-Approval: Start by getting pre-approved for a mortgage. This will give you a clear understanding of your budget and help you avoid disappointment when searching for properties that are beyond your financial reach.
• Credit Score Management: Maintain a healthy credit score by paying bills on time, keeping credit card balances low, and avoiding excessive new credit applications. A good credit score will increase your chances of securing favorable mortgage terms.
• Down Payment Savings: Start saving for your down payment early. Consider using strategies like automatic contributions to a dedicated savings account or taking advantage of programs like the FHSA to accelerate your savings.
• Homebuyer Grants and Rebates: Research other grants, rebates, and incentives available to first-time home buyers in Calgary. These programs can provide additional financial support and reduce your overall costs.
• Homeownership Costs: Remember that homeownership comes with additional costs beyond the purchase price. Budget for ongoing expenses such as property taxes, insurance, maintenance, and utilities.
• Home Insurance: Secure adequate home insurance coverage to protect your investment. Shop around for different insurance providers to find the best coverage at the most competitive rates.
• Real Estate Market Research: Stay informed about the Calgary real estate market by reading market reports, attending open houses, and following real estate news. This will help you gauge market conditions and make informed decisions.
• Legal Considerations: Consult with a real estate lawyer to ensure all legal aspects of your home purchase are handled correctly. They will review contracts, conduct title searches, and guide you through the closing process.
• Home Maintenance: Plan for ongoing home maintenance and repairs. Set aside a portion of your budget for ongoing upkeep and unexpected repairs that may arise.

Buying a house in Calgary as a first-time home buyer is an exciting and rewarding experience. By understanding the laws, incentives, and programs available to you, conducting thorough research, and seeking professional guidance, you can navigate the process with confidence. Remember to stay informed, be patient, and make decisions that align with your financial goals and lifestyle. With careful planning and the right support, you'll soon be the proud owner of your dream home in Calgary.