1st-time homebuyers say 'no thanks' to B.C. loan
B.C. government announced program to offer interest-free loans of up to $37,500 to 1st-time homebuyers
Two first-time homebuyers who qualify for the provincial government's new interest-free loan program say they won't be taking advantage of the loan because they don't want to go into unnecessary debt.
On Dec. 15, the B.C. government announced a new program for first-time homebuyers. The program will provide a loan of up to $37,500 with a 25-year mortgage. The loan is interest-free and payment-free for the first five years and can be used towards a home with a purchase price of up to $750,000.
Andy Anissimoff, a 37-year-old visual artist who currently rents in Squamish, is eligible for the program but said he doesn't plan on using it because he thinks the real estate market is overheated.
Anissimoff started looking for a duplex in 2013, but as the months passed, he saw prices rising at an alarming rate.
We want to still enjoy life and other things but not overextend ourselves- Eligible first-time homebuyer Lauren Hinnen
"This is officially crazy," he said. "And over the next year I watched [the market] balloon even further … I'm convinced that it's a dangerous time."
At this point, he doesn't feel comfortable entering into the market.
"In certain parts of this province this loan could be awesome," he said. "But in Vancouver, Victoria and Squamish, I really think they're exposing vulnerable buyers who are going to see this money evaporate in three months."
Another eligible first-time buyer, Lauren Hinnen, is in a similar situation.
Hinnen, a non-profit worker who lives in Mission with her husband, says she's uneasy about getting a loan to pay down another loan.
"We didn't want to overextend ourselves," she said. "We're both really fiscally responsible and have strived really hard to be consumer debt-free over the years."
Hinnen said it has been difficult to find a house, or even a condo or townhouse within her price range.
"We're not going to buy an overvalued house," she said. "I'm actually concerned about going into the market with this looming because it is going to raise the amount of people looking for homes under the $750,000 range."
At the time of the announcement, B.C. Minister of Housing Rich Coleman said there would be an applicant screening procedure to prevent people from taking on too much debt.
For now, however, both Hinnen and Anissimoff plan to take a wait-and-see approach.
"We want to still enjoy life and other things but not overextend ourselves," said Hinnen.
With files from The Early Edition
To listen to the interview, click on the link labelled These eligible 1st-time homebuyers are not interested in B.C. loan program