Buying Your Home in 2017-7 Steps to Maximize Your RRSP Down Payment

General Jordan Thomson 28 Feb

BUYING YOUR FIRST HOME IN 2017? – 7 STEPS TO MAXIMIZE YOUR RRSP DOWN PAYMENT

RRSP’s For Your Down Payment??Are you thinking of buying your first home in 2017? If yes, contributing to your RRSP before the March 1 contribution deadline can help you increase your funds available for your purchase. Follow the 7 steps below so you can maximize your available funds to purchase your first home.

Step 1: Check to see if you fit all the Home Buyers’ Plan (HBP) requirements at www.cra-arc.gc.ca/hbp/. If you do continue to the next step.

Step 2: Consult with your Dominion Lending Centres Mortgage Broker to review your credit and plan ahead so you are mortgage ready. Your broker will help you figure out what you qualify for as well as help you navigate all the first-time home buyer programs such as the new BC Home Owners Mortgage and Equity Program.

Step 3: Contribute to your RRSP to top it up to $25,000 (check your contribution room to confirm the maximum you can contribute) for each buyer. Contribute to the highest income earners RRSP first to maximize your tax refund. If you don’t have the cash to contribute, then it may be beneficial to borrow funds to contribute to your RRSP but talk to your mortgage broker first to ensure your credit is in line to do so.

Step 4: Do your taxes as soon as possible so you can get your tax refund in your bank account.

Step 5: If you didn’t maximize your RRSP to $25,000 put your tax refund into your RRSP (highest income earner first) to help reduce your taxes next year.

Step 6: Now that your funds are in your accounts review your options with your mortgage broker and let your RRSP contributions stay in your account for 90 days for the withdrawal to qualify under the HBP.

Step 7: Begin searching for your first home. Be sure to plan the closing date to be after the minimum 90 days required for the funds to be in your RRSP and allow time for funds to transfer out of your account.

Important 2017 Dates:

March 1 – the 2016 RRSP Contribution Deadline

February 20 – the first day you can file your 2016 income taxes

May 1 – the deadline to file your taxes if you are not self-employed

April 30 – all income taxes must be paid to CRA by all tax payers

June 15 – the deadline to file if you are self-employed

Good to Knows about the Home Buyers’ Plan:

Funds withdrawn from your RRSP before they have been in your account for 90 days are not eligible under the HBP and income tax will be withheld from the withdrawal
You can use your RRSP withdrawal for anything from you down payment, paying off debts, moving costs and more as long as you’re in a contract to purchase your first home
You must repay the withdrawal amount over 15 years starting the year following your withdrawal or pay tax on 1/15th of the amount withdrawn in tax years you do not pay it back.
Your Dominion Lending Centres Mortgage Professional will help you plan to buy your first home. It’s never too early to start your mortgage application. Contact us today to get started!

Thank you to DLC’s Kathleen Dediluke for this great info!

Greater Vancouver Home Sales, Prices to Drop in 2017, Recover in 2018: BCREA

Latest News Jordan Thomson 20 Feb

Full-year residential resale transactions will fall to the still-high levels seen a couple of years ago, while local home prices will drop around seven per cent, predicts association.

After a strong 2016 that saw a slowdown in the second half of the year, Greater Vancouver home sales in 2017 are likely to fall 16.8 per cent to 34,000 units, before recovering by about five per cent to 35,750 sales in 2018, according to a British Columbia Real Estate Association (BCREA) forecast released February 17.

Home Sales, Average Sale Prices Down “Significantly” Across BC: BCREA
Home prices in the region will average $942,000 across the full year for all property types – a decline of 7.2 per cent from 2016’s average – before slowly climbing up again by about 2.2 per cent in 2018, the report predicted.

The Fraser Valley is predicted to see a drop in sales volume of 14.7 per cent for the whole of this year, followed by a further decline in 2018 of 4.1 per cent. Prices in the Fraser Valley are expected to see a three per cent average drop this year and a near-two per cent recovery in 2018.

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When My Mortgage Broker Can Help

General Jordan Thomson 16 Feb

BC real estate is an ever changing landscape, and so too is the world of mortgages! More and more, consumers are using mortgage brokers over their local bank or credit union to receive unbiased mortgage advice, first or second mortgages, refinances and more. It’s becoming more difficult to get financing these days since the government introduced tougher rules and regulations, so it makes sense to be informed of all the options available to you.

There are many times when you can call on your mortgage broker that you may not think of and it is during these life changes that we want to help.

When My Mortgage Broker Can Help:

Getting Married– Building a life and home together
Need Space– Your current home is too cramped
Losing Money– If your rate is too high, you are kissing your money goodbye
Bad Neighbours-You’re living beside Mr and Mrs Crazy
Divorce– You want to keep your home, we can help
Too Many Bills– Your home may hold the key to paying off debt

Here at Dominion Lending Centres, our brokers have the knowledge and expertise to provide you with the advice and solutions that you need, helping you manage the ups and downs of your life.

Jordan Thomson, MBI
jordan@citywidemortgage.ca | 604.725.1607

What You Need to Know About No Frills Mortgages

Mortgage Tips Jordan Thomson 15 Feb

WHAT YOU NEED TO KNOW ABOUT NO FRILLS MORTGAGES

What you Need to Know About No Frills Mortgages

 

You’ve been offered an amazing rate and you just can’t believe how much you will save. You’re super excited and getting ready to go sign off on the papers when you randomly run into a mortgage broker and mention the deal you scored. The broker says to you that’s an awesome rate, any idea what the penalty calculation is if you need to refinance in the future?. Wait what…isn’t it the same as the last mortgage I had?

Maybe but maybe not. There are a lot of new mortgage products available on the market that offer lower rates while giving up other benefits. These mortgage options may have higher penalties, lower prepayment privileges or even worse they could have a bone fide sale clause.

I don’t blame a consumer for always thinking rate first. The industry as a whole is guilty of shoving rates in our face anytime they possibly can. It’s the easiest part of a mortgage to compare and easiest to advertise. But definitely not the most important part.

Being aware of all the terms and conditions is the key to finding your best mortgage option. You should be aware that there are mortgages that may come with one or more of the following terms:

* Sales only clause, meaning you may not be able to refinance your mortgage until your term is up

* A higher set pay out penalty. Meaning you may have to pay more than the standard 3 months interest or Interest Rate Differential penalty.

* Smaller prepayment options

* and more!

Always ask these 5 Questions when offered a mortgage:

1. How is the pay out penalty calculated if I break the mortgage?

2. Can I refinance with another lender before my term is up?

3. Is the mortgage registered as a Standard or Collateral charge on my land title?

4. What are my prepayment privileges?

5. Is the mortgage portable and assumable?

Bottom line is that knowing all the fine print is essential in making an educated mortgage decision. We never know what is going to happen in life and saving a little bit on your mortgage rate may cost you more in the long run.

Contact your local Dominion Lending Centres mortgage professional today to discuss your mortgage options!

Thanks to DLC’s Kathleen Dediluke for this great article.