RRSP – Home Buyers Plan
Tax savings are a good reason to invest into an RRSP. As a first time home buyer the Federal government’s Home Buyers’ Plan (HBP), allows first time home buyers to have the opportunity to put that tax-free cash towards a new home as down payment. Each individual involved in purchasing a home can use a maximum of $35,000 from their RRSP up from the previous $25,000 — provided it qualifies for the first time home buyer plan for all parties involved. You can not have owned a home or your lived in your spouses home if he owned it for the last 4 years to qualify, and if you have used the home buyer plan in the past you must have repaid the funds in full to access the plan again. The home must be used as a principle residence, and all funds must be withdrawn from the RRSP within 30 days of the property’s closing date. However for financing you will have to pull the funds while you are getting your mortgage approval. You need to have the RRSP’s in the account for a minimum of 90 days to be allowed to withdraw them without being taxed. You Red Deer home ownership is possible, call your Red Deer Mortgage Broker Jodi and her highly experienced staff today 587-315-3525 . You have 15 years to repay your RRSP ‘loan’, and payments must start two years after the initial home purchase. Every year, you will receive a notice of assessment stating the amount you have repaid, your total balance, and the required amount for your next payment. Apply On-Line Today! For more information about the HBP, visit Canada Revenue Agency’s website.
We not only help you get approved on a mortgage we help educate you on all the different options regarding home buying. The first time home buyer plan is a great option to access tax free RRSP withdraw for your down payment. The government is also unrolling a shared equity program in the fall of 2019. This will help home buyers who want to save money every month on their mortgage by allowing the government to take part into the shared equity on your home. For a new build home they will give you 10% down payment as a second mortgage and with a used home they will give 5% towards a second mortgage. Keep in mind they will also then have shared equity into your new home. If the values go up the government also makes an investment. These are just some of the things your trusted Red Deer mortgage brokers at Whalen Mortgages can help you understand. We believe in clear communication and explaining all options to our clients, educating them on every aspect of their mortgage. We know informed decisions result in the most favorable outcome.
There are some government programs that help home buyers. The RRSP first time home buyer is a really good option if you do not want to spend your savings in the bank. You have 15 years to repay this loan in full. Maybe you have most of your down payment but need a little more you can invest the funds you do have into an RRSP and get a refund from your income taxes due to less income being claimed and the RRSP tax savings. This will give you some extra cash when you do your taxes and as long as the RRSP funds have been in the RRSP account for 90 days you can still use these funds towards your down payment as a first time home buyer. Call us today to ask any additional questions or get your pre-approval so you can be out house shopping for your new home in Red Deer.