Did you know you can use your RSP’s as a down payment to purchase a home?  

Here’s the details…

• It allows you to withdraw up to $25,000 from your RRSP’s to buy or build a qualifying home (you may not be allowed to use locked in RRSP’s)

• Each applicant can withdraw up to $25,000

• The RRSP issuer will not withhold tax on these amounts

• Withdrawals are to be repaid over 15 years

• You are not considered a first time home buyer if you have owned a home that you have occupied as your principal place of residence

• Funds must be in your RRSP for at least 92 days

• You can participate in the HBP more than once if any and all previous RRSP withdrawals are repaid in full.

Do I meet the HBP eligibility conditions?

• You must be considered a first-time home buyer.
• You must have a written agreement to buy or build a qualifying home for yourself.

Or

• You must have a written agreement to buy or build a qualifying home for a related person with a disability, or to help a related person with a disability buy or build a qualifying home (obtaining a pre-approved mortgage does not satisfy this condition).

• You must intend to occupy in the qualifying home as your principal place of residence within one year after buying or building it. If you buy or build a qualifying home for a related person with a disability, or help a related person with a disability buy or build a qualifying home, you must intend that that person occupies the qualifying home as his or her principal place of residence.

In all cases, if you have previously participated in the HBP, you may be able to do so again if your repayable HBP balance on January 1st of the year of the withdrawal is zero and you meet all the other HBP eligibility conditions.

Still struggling to save for that down payment? There’s still options to buy a home without a down payment. Must have strong credit and income, so if you do and you want to explore options…contact me, we have a program for that

Curious about the Vancouver housing market stats?  Check out the link from our very own economist Dr. Sherry Cooper.  She discusses the Vancouver real estate stats as well as the new budget announced by the BC government on Tuesday. 

Click Here to Read Full Article

The BC Minister of Finance has announced several changes to the Property Transfer Tax program, effective Wednesday, February 17, 2016, which include:

1. a property transfer tax exemption for Canadian citizens and permanent residents who purchase newly-built homes, condos and townhouses under $750,000. Purchasers must live in the property for at least one year. This is a potential savings in closing costs of up to $13,000;
2. a one percent increase in property transfer tax to three percent for homes which are sold over the $2 million mark;
3. the first time home buyers exemption will remain in place for homes under $475,000;
4. buyers will need to start disclosing their country of residence in all property transactions;
5. the beneficial ownership of properties held by corporations will also be tracked.

Today Finance Minister Bill Morneau announced changes to down payment requirements. Effective February 15, 2016, the minimum down payment for new insured mortgages will increase from five per cent to 10 per cent for the portion of the house price above $500,000. The five per cent minimum down payment for properties up to $500,000 remains unchanged.

Homes priced at more than $1 million by law require a minimum down payment of 20 per cent. Today’s announcement therefore focuses on homes priced between $500,000 and $1 million.

In the Mortgage Professionals Canada (MPC) Fall Report, Chief Economist, Will Dunning discusses why raising the down payment could cause problems for the housing market, including this cautionary observation: “Rising prices have made it increasingly difficult for first-time home buyers to accumulate down payments. Increasing down payment requirements would, most likely, severely dampen housing demands from people who are financially well-qualified to make their monthly mortgage payments.”

MPC notes that the 10% requirement does represent a graduated approach while the Ministry of Finance commented that they believe this will only impact 1% of home purchasers.

If you are self employed and haven’t taken a mortgage in a few years, be prepared for a different process than what you are used to.  Lenders have tightened up on what they will allow and want to see that you have a viable business before approving your loan.  

Here are the most typical documents that you should have available when applying for your next mortgage:

• Last 2 years T1 Generals  – these are provided to you from your accountant and it’s the full copy of your tax return.  Include your Statement of Business Activities and any additional schedules.  
• Last 2 years Notice of Assessments – these are your personal Notice of Assessments that you get back from CRA after you file your taxes
• Confirmation that any outstanding income tax owed to CRA has been paid
• Corporate Documents – If you are incorporated, include your incorporation paperwork confirming how long you have been in business
• Last 2 years Financial Statements for your company

If you would like to know what you qualify for and how most lenders determine that, contact me directly for a consultation on how to best structure your next mortgage.  

NOA stands for Notice of Assessment.  It is an assessment that the CRA completes after personal income taxes are filed.  Once your tax return is reviewed by the CRA, they will send out the Notice of Assessment to confirm if you either have a balance due to CRA or if you are getting a refund.  This document is one of the most requested items when gettting approved for a mortgage.  Do not throw this document out, keep it filed with your tax return for the corresponding tax year. 

If you need to request these again, you can do so online with CRA if you already have My Account set up.  If not, you can sign up but then CRA will mail you a password.  It takes about 5 days to get the account set up and then you will be able to access previous tax years if needed at any time. 

Click here  to request your NOA’s 

If you need clarification, call anytime at 604-552-6190. 

Just remember, keep them and that most likely you will need to provide the last 2 years next time you need to qualify for a mortgage.

Banks allow home buyers to have a gifted down payment from an immediate family member.  Immediate family member is considered mother, father, sister, brother or grandparents.  When receiving a gift from a family member, the funds must be deposited into the home buyers bank account 15 days before closing of the mortgage.  Once funds have been deposited into your account, you would provide a bank statement and a gift letter from the bank that is doing your mortgage.  Each bank has their own form. 

Be reminded that the amount written on the letter must be exactly the same (to the penny) as the amount deposited into your bank account. 

Once you have the gift letter signed by your family member and your bank statement printed out, give those copies to your mortgage broker. 

If you have any questions on gifted down payments, contact me at the office at 604-552-6190 or email support@primexmortgages.com

Be reminded that if you are purchasing a home, all banks require a 90 day history of bank statements or investment statements confirming the funds have been in your account for the past 3 months.  If there are deposits over $2000, be prepared to provide further paper trail to those deposits.  If you are getting a gift from a family member that is helping towards down payment, then you will need a gift letter signed by your immediate family member.  See the next blog post on Gifted Down Payments. 

Other reminders on down payment confirmation, you can use online statements providing they have your name on them and not just an account number. 

If your down payment funds are not in a Canadian account, this could pose a problem.  Down payment requirements in Canada are required to be in a Canadian account for 45 days prior to funding (closing of the mortgage) 

If you ever have questions on down payment confirmation, easiest thing is to contact us here at the office.  604-552-6190 or email me at support@primexmortgages.com

Canada’s three most watched real estate boards reported January results last week. Vancouver saw strong sales and price growth and a reduction is listings which increased competition among buyers while Toronto also saw strong sales and continued rising prices but with an increase in listings which provided buyers with more choice. In Calgary, prices have so far held on to most of the gains made in 2014 but many buyers are waiting for economic conditions to stabilize before proceeding. This caused a sharp drop in sales volumes in January and a surge of new listings which may create downward pressure on prices.

CMHC published its latest Housing Market Outlook last week which calls for a slight reduction in housing starts, stable resale volumes and annual average price gains of about 1.5% over the next two years.

Statistics Canada released January employment data on Friday which showed that the Canadian economy created more than 35,000 jobs for the month, pushing the unemployment rate down to 6.6%. The US economy posted another strong month, creating 257,000 jobs in January.

The benchmark government of Canada five year bond yield ended the week at 0.79%, up from 0.62% the previous week.