First time buyers: Make the most of the Home Buyers Plan

If you're a first time homebuyer, you can use the federal Home Buyers Plan (HBP) to take out funds from your registered retirement savings plan (RRSP) to use towards the purchase of a qualifying home.

The Plan allows first time buyers to withdraw up to $25,000 from their RRSP (or, up to a maximum of $50,000 per couple) tax free, and have 15 years over which to pay the funds back into their RRSP.

While 44 percent of first-time homebuyers are using the HBP to make a down payment, 46 percent of recent first-time buyers have no RRSP savings to use toward a down payment, according to mortgage insurer Genworth Financial Canada. If you do not have RRSPs, we can show you how to establish an RRSP with borrowed funds, and use the resulting tax refund for a down payment or a lump-sum mortgage payment.

If you or someone you know would like to learn more about the HBP or about saving for a down payment, talk to us. Also, www.Moneytools.ca from the Financial Consumer Agency of Canada has useful information on making a budget and sticking to it.

Rick Moran, AMP, OMB # M08001997

Buying a home? Here are some things you need to know (Part 2)

The spring house hunt is here in markets across Canada. For those navigating the home purchase process, this week we look at additional home buying tips:

6. Borrow up to $25,000 for your down payment from your RRSP – tax-free! If you are a first-time buyer, the Homebuyers Plan (HBP) allows you to withdraw up to $25,000 from your registered retirement savings plans (RRSPs) to buy or build your home. An Invis mortgage professional can tell you more about this program.

7. Understand closing costs. When buying a home, it pays to be informed about closing costs, which can represent up to three per cent of the purchase price, including: land transfer tax, lawyer's fees, appraisal fees, title insurance and home inspection fees.

8. Know your financing options. Many lenders offer mortgages which feature a 5% down payment, or in some cases 100% financing. If you borrow more than 80 per cent of the purchase price, your mortgage must be insured, typically by the Canadian Mortgage and Housing Corporation (CMHC), Genworth Financial or Canada Guaranty.

9. Don't do it alone – explore the benefits offered by mortgage brokers. Mortgage brokers act as a one-stop shop for planning advice and the best rates. Invis mortgage professionals work with prospective homeowners across Canada to provide valuable advice before and during the home buying process.



Rick Moran, AMP, OMB # M08001997

Buying a home? Here are some things you need to know (Part I)

For most Canadians, buying a home is the single largest financial transaction they will ever encounter and it's critical that prospective homebuyers prepare themselves before they start their search.

This week we look at the some tips for those navigating the home buying process:

1. Know what you can afford. A mortgage pre-approval offers peace of mind by helping you determine the price range of homes you can shop for and the maximum mortgage you can afford. Remember that final mortgage approval is also based on your information and the property that is to be mortgaged.

2. Lock-in a mortgage rate before you begin shopping for a home. Many financial institutions will lock-in a rate for up to 120 days when pre-approving potential borrowers for a mortgage. Remember to renew the 120-day period if mortgage rates fall during this time, or better yet let an Invis mortgage professional do this for you.

3. Be specific about your lifestyle needs. Remember to consider not just the home itself but the property as a whole, including the neighbourhood and its proximity to work, shopping, restaurants, and other important places you'll be spending your time at.

4. Don't confuse an appraisal with a home inspection – you need both! An appraisal determines the worth of the property by estimating the market value of the land and building. A home inspection inspects the adequacy and condition of the building and all major systems.

5. Place conditions on your offer. Conditions provide you with the flexibility of withdrawing your offer if you are unable to obtain the necessary financing, or if the inspection reveals structural problems with the home. Even with pre-approval, homebuyers who make an offer without conditions do so at their own risk.

Part 2 coming next week.





Rick Moran, AMP, OMB # M08001997