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Barb Eglauer Mortgage Update February 2019

Down Payment Options and Tax Credits for First Time Home Buyers

Purchasing a home is a big financial commitment. In addition to moving costs and closing costs, most home purchases require a down payment of at least 5% of the purchase price.  This is the amount of money you are personally committing.  Coming up with a down payment can be challenging; however, there are options, depending on the lender, the location of the purchased property, the loan to value and your credit score.

Ideally, you’ve saved the down payment in a savings account or have an RRSP, from which you can withdraw up to $25,000 with no penalty under the Home Buyer’s Plan (HBP). If you choose to take advantage of the HBP, here is what you need to know.

RRSP Withdrawal Conditions

  1. Must be a resident of Canada at the time of the withdrawal.
  2. Must receive or be considered to have received, all withdrawals in the same calendar year.
  3. Only the person who is entitled to receive payments from the RRSP can withdraw funds from an RRSP. You can withdraw funds from more than one RRSP as long as you are the owner of each RRSP. Your RRSP issuer will not withhold tax on withdrawal amounts of $25,000 or less.
  4. Your RRSP contributions must stay in the RRSP for at least 90 days before you can withdraw them under the HBP.
  5. You have to buy or build a qualifying home for yourself, for a related person with a disability, or to help a related person with a disability buy or build a qualifying home.
  6. Also, there are a number of rules for repayment that we can review together.

If an RRSP withdrawal is not an option, here are some other avenues to consider:

  • Non-repayable gifted funds from an immediate relative
  • In some cases, you can borrow the down payment, just be aware that the loan payment will be factored into your affordability calculation
  • You can sell some personal property. Make sure you have proof of ownership and a paper trail. If a lender sees a large amount of money deposited into your account, they want to know where it came from.
  • You can sell any assets, such as stocks or bonds
  • Use the cash value built up in your life insurance policy
  • You can use your TFSA. Remember you can withdraw as much as you want tax-free. As with an RRSP withdrawal, there are few rules to repayment that we can review.

Because different lenders have different down payment requirements, I would be happy to discuss all your options.

I’d also like to mention the First Time Home Buyer’s Tax Credit (HBTC). You will qualify if:

  • You or your spouse or common-law partner acquired a qualifying home; and
  • You did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years.

A qualifying home includes existing homes and those being constructed as well as single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings.

The tax credit is not connected to Home Buyer’s Plan so your eligibility for the tax does not change whether or not you also participate in the Plan.

Call me today.

Clark & Clark Lawyers – One of our preferred Law Firms to Deal with your Real Estate Needs

 

Clark & Clark has been serving the Calgary Real Estate community since 1995. Whether you are a first time home buyer, an experienced seller/ buyer, a new client or a repeat client, we are committed to providing exemplary service to you.

 

The Calgary Real Estate legal community is a competitive environment with many law firms competing for your business. We are proud to say that our long successful track record is partly due to the fact that once our clients are introduced to us they keep returning to us for all their future real estate and legal services. We have many realtors and mortgage brokers across Calgary and Alberta, that continue to refer their clients to us because they know they can trust us with their valued clients.

 

At Clark & Clark we are in the business of building long term relationships and as a valued client you will have the benefit of our teams pooled capabilities, knowledge and experience to ensure you receive the best results.

 

We offer free parking and are currently located next to the Chinook L.R.T. station.

 

If you looking for real estate law firm with an exemplary track record, call us on 403-777-1444 or email us at info@clarklegal.com.

 

We will be happy to talk to you and to provide you with a fee estimate or go online and use our Real Estate Fee Calculator at http://clarklegal.com/real-estate/fees-calculator link.

 

Thank you,

 

Clark & Clark Lawyers

 

 

KJ HOME INSPECTIONS – Our Preferred Home Inspection Agency

Why get a home inspection? Home inspections are a critical step in the home buying process with single family homes, acreages, duplexes, townhomes and condominiums. Having a home inspection on a house is like having a mechanical completed on a car you want to buy. In this way, you know that all the systems are working properly, have been maintained and you will not be surprised by expensive repairs, safety concerns and renovations. In a home inspection, the inspector evaluates the HVAC (heating, ventilation, air conditioning), Roofing, Exterior, Electrical, Plumbing, Insulation/Venting, Interior, Attic, Attached or Detached Garage, Deck/Patio, Grading/Drainage, Eavestroughs/Downspouts, and much more… You need a person to evaluate these parts of the home who are experienced and formally educated in all these systems.

 

Why get a KJ Home Inspection? Kerry Palyga, CPI is a Certified Professional Home Inspector. Licensed by the Province of Alberta, bonded, insured and accredited by The International Association of Certified Home Inspectors (InterNACHI), subscribing to the high expectations of their Standards of Practice and Code of Ethics. Kerry has been involved in all aspects of residential construction and renovation since 1995 with single family homes, townhouses, acreages, manufactured homes and condominiums of all sizes and ages. Having been involved in the restoration and repair of almost everything that can go wrong with a home, he is well qualified to evaluate any home for pre-purchase, pre-listing or end of first year new-home warranty. He brings a keen eye for detail, a thorough investigative background, construction, renovation and safety experience. Coupled with the Industries Best Home Inspection Training and Continuing Education Program, a KJ Home Inspection will give you the peace of mind to proceed with your purchase or selling decision.

To learn more about KJ Home Inspections, please visit our website at:

http://www.kjhomeinspections.ca/

See what a KJ Home Inspection looks like in this video:

http://www.kjhomeinspections.ca/video.html