Killing Two Birds with One Stone
November 15 2012 Posted by Mary Poburan
MONDAYS WITH MARY....
Killing Two Birds with One Stone..
Down payment is often one of the most misunderstood requirements of mortgage qualification. All Canadians need 5% down in order to purchase a home. This 5% needs to be verified via a 90 day bank statement history or a gift letter in addition to the verification of closing costs equal to 1.5% of the purchase price for things such as Legal f
ees, inspections, etc..In Alberta we are fortunate to have minimal fees so in many cases the amount we need to verify is much more than actual expenses. As a word of advice, however, having this extra savings on hand is critical to cover the unexpected costs of moving.
For first time buyers, a withdrawal from an RSP is also an acceptable form of down payment. Are you looking to buy a home at least 90 days from now? Do you qualify as a first time home buyer? Do you have unused RSP room? If so, you may be interested to know that you could benefit from the tax savings of an RSP AND use the money for your down payment(as long as you are buying after a 90 day waiting period) .As long as a deposit is made 90 days prior to the withdrawal, you will be able to use your deposit for the down payment of your new home. For example, a contribution $15000.00 to an RSP could translate to a $5000.00 tax savings (depending on tax bracket). This savings can then be used to help you get settled into your new home!
If you are planning on buying a home, have the money saved in a regular account, or even if you are expecting a gift, consider the placement of funds into an RSP NOW in order to maximize the use of your savings. Call me for details or to answer any questions you may have. What a great way to kill Two Birds with one Stone!!
For first time buyers, a withdrawal from an RSP is also an acceptable form of down payment. Are you looking to buy a home at least 90 days from now? Do you qualify as a first time home buyer? Do you have unused RSP room? If so, you may be interested to know that you could benefit from the tax savings of an RSP AND use the money for your down payment(as long as you are buying after a 90 day waiting period) .As long as a deposit is made 90 days prior to the withdrawal, you will be able to use your deposit for the down payment of your new home. For example, a contribution $15000.00 to an RSP could translate to a $5000.00 tax savings (depending on tax bracket). This savings can then be used to help you get settled into your new home!
If you are planning on buying a home, have the money saved in a regular account, or even if you are expecting a gift, consider the placement of funds into an RSP NOW in order to maximize the use of your savings. Call me for details or to answer any questions you may have. What a great way to kill Two Birds with one Stone!!
