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Are you planning
to buy your first home in spring?
Then make your plans now.
First, get a
pre-approved mortgage. It
shows what you can afford to buy based on what you can afford to
borrow. There’s no
cost or obligation to you to acquire a pre-approval with any bank.
Most banks will
guarantee you a current lower interest for 90 days and even longer.
You get the benefit now that the rate has come down.
Should the rates increases during the pre-approval period, you
have peace of mind that you are receiving the lower rates.
First time home
buyers can now borrow up to $20,000 from their RRSP interest free
to buy a home. It
also cuts to just 90 days waiting period before RRSP funds could
be used under the Home
Buyers’ Plan (HBP) or RRSP Program.
Deposit the
maximum in your RRSP for 2009 now, at least 90 days before closing
even if that means borrowing.
For Example:
If you are a first time buyer and has a 2009 limit of
$9,000 but you only have $4,000 cash.
You can borrow $5,000 to top up your RRSP.
Mid November you put the $9,000 into your RRSP for 2006 and
get a $9,000 tax deduction against your 2009 income.
Late January 2010,
you buy a house to close in mid April.
Before closing, you withdraw that $9,000 under the
HBP (on
deposit for at least 90 days).
You used your own $4,000 cash for downpayment and repay the
$5,000 loan. To
finance the purchase, assuming
you took a $100,000 mortgage (assuming the interest rate over its
25 year amortized life is 8 percent).
You must start
repaying the $9,000 withdrawn under the HBP (including the $5,000
borrowed funds) to RRSP by February, 2011.
Repayment must
begin in the second calendar year after the funds are removed, or
in the first 60 days of the following year.)
You get to return $600 yearly to your RRSP from February
2009 to 2024 to repay that $9,000.
Finally: If
you have the minimum 5% downpayment and do not want to use the
RRSP program, you can buy your first home. Get your pre-approval
now. Interest rates are its lowest. Once you get your
pre-approval, I can help you find your home in any neighbourhood
you want....anytime just call me.
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