......and you are like so many other homeowners today who find themselves upside down and possibly unable to keep up mortgage payments. What you need to know is that you have options. In fact, I have nine strategies that can help. When can we get together to review them?’
Monday, November 22, 2010
Monday, August 16, 2010
FIRST TIME BUYERS!
Both the government of Canada and the Ontario government have established programs to assist first time home buyers. The two best known programs are the RRSP Home Buyer's Plan and the Land Transfer Tax rebate.
In addition to information about the programs to assist first time home buyers, I have also added a paragraph with tips. If you are buying a home, your real estate sales representative can help you find the right type of home at the right price, prepare your offer to purchase, and present your offer to the seller. In most cases, there is no direct cost to you for these services.
The RRSP Home Buyer's Plan (HBP)
It was introduced by the federal government, and allows first time home buyers to withdraw up to $20,000 from their RRSPs tax free to use towards the purchase of a home.
To qualify as a first time home buyer, purchaser must not have lived in a home owned by himself or his spouse in the last five years. If both you and your spouse qualify under the Plan, you can each withdraw up to $25,000 from your RRSPs for a total of $ 50,000.
However, under existing requirements, you or your spouse or common-law partner may not own the qualifying home for more than 30 days before the final withdrawal is made in 2010.
Before you are entitled to withdraw the money from your RRSP, you must have entered into a written agreement to purchase or build a home that you intend to occupy as your principal residence. The purchase of a cottage, for example, would not qualify for this program because it is not a principal residence.
Money can be withdrawn from your RRSP provided it has been in your RRSP for at least 90 days. If you have signed an Agreement of Purchase and Sale and you have at least 90 days until your closing, you can open an RRSP and make a contribution, receive the tax deferred benefit and then withdraw the same money and put it towards the purchase of your home.
Money withdrawn under this federal program must be paid back to your RRSP within 15 years. People generally deposit one fifteenth of the amount withdrawn back to the RRSP over each of the following 15 years. If you do not pay the full amount back to your RRSP within 15 years, the amount outstanding will be subject to tax when you file your income tax return in the following year.
What if you don't have any money in your RRSP?
Do not worry, you can still take advantage of the Home Buyers Plan (HBP). If you are earning income, or have earned income in the past few years, you are entitled to contribute to an RRSP. What is not very well known about the HBP is that you can contribute to an RRSP retroactive. Therefore, check to see what your RRSP contribution limit is. It is shown on your previous years Notice of Assessment, or call Revenue Canada.
If you need help raising a downpayment, the HBP may be of some use to you. If there are significant unused contributions from previous years, take out a short-term RRSP loan to cover them. After 90 days, you repay your loan by cashing in your RRSP and you use your tax refund for the downpayment on your new home.
A tax refund is an acceptable downpayment if it is in hand at the time of closing.
OHOSP - Ontario Home Ownership Savings Plan
You may have heard about the Ontario Home Ownership Savings Plan (OHOSP) as being another government incentive for first-time home buyers. However, this program is proposed to end on December 31, 2005 and new applications are no longer accepted.
FIRST TIME BUYERS FOR NEWLY BUILT HOMES
To continue helping first-time buyers of newly built homes and to promote job creation in the housing industry, the Ontario Government has made the Land Transfer Tax refund program for first-time home buyers permanent. To qualify for a refund:
- you must be at least 18 years old;
- you cannot have previously owned a home, or an interest in a home anywhere in the world;
- your spouse cannot have owned a home, or an interest in a home anywhere while he/she was your spouse;
- you cannot have received an Ontario Home Ownership Savings Plan (OHOSP) based refund of Land
Transfer Tax.
Land Transfer Tax Refund For 1st Time Buyers
The maximum refund is $2,000 and qualifying purchasers must apply for the refund no later than 18 months after registration of the home if they do not receive the refund at the time of registration.
For information about the refund, visit the website of the Ontario Ministry of Finance. All the information provided here on this blog must be re-verified with respective sources, offices, goverments and ministries as rules may get changed anytime. So the readers must not rely all on them.
In addition to information about the programs to assist first time home buyers, I have also added a paragraph with tips. If you are buying a home, your real estate sales representative can help you find the right type of home at the right price, prepare your offer to purchase, and present your offer to the seller. In most cases, there is no direct cost to you for these services.
The RRSP Home Buyer's Plan (HBP)
It was introduced by the federal government, and allows first time home buyers to withdraw up to $20,000 from their RRSPs tax free to use towards the purchase of a home.
To qualify as a first time home buyer, purchaser must not have lived in a home owned by himself or his spouse in the last five years. If both you and your spouse qualify under the Plan, you can each withdraw up to $25,000 from your RRSPs for a total of $ 50,000.
However, under existing requirements, you or your spouse or common-law partner may not own the qualifying home for more than 30 days before the final withdrawal is made in 2010.
Before you are entitled to withdraw the money from your RRSP, you must have entered into a written agreement to purchase or build a home that you intend to occupy as your principal residence. The purchase of a cottage, for example, would not qualify for this program because it is not a principal residence.
Money can be withdrawn from your RRSP provided it has been in your RRSP for at least 90 days. If you have signed an Agreement of Purchase and Sale and you have at least 90 days until your closing, you can open an RRSP and make a contribution, receive the tax deferred benefit and then withdraw the same money and put it towards the purchase of your home.
Money withdrawn under this federal program must be paid back to your RRSP within 15 years. People generally deposit one fifteenth of the amount withdrawn back to the RRSP over each of the following 15 years. If you do not pay the full amount back to your RRSP within 15 years, the amount outstanding will be subject to tax when you file your income tax return in the following year.
What if you don't have any money in your RRSP?
Do not worry, you can still take advantage of the Home Buyers Plan (HBP). If you are earning income, or have earned income in the past few years, you are entitled to contribute to an RRSP. What is not very well known about the HBP is that you can contribute to an RRSP retroactive. Therefore, check to see what your RRSP contribution limit is. It is shown on your previous years Notice of Assessment, or call Revenue Canada.
If you need help raising a downpayment, the HBP may be of some use to you. If there are significant unused contributions from previous years, take out a short-term RRSP loan to cover them. After 90 days, you repay your loan by cashing in your RRSP and you use your tax refund for the downpayment on your new home.
A tax refund is an acceptable downpayment if it is in hand at the time of closing.
OHOSP - Ontario Home Ownership Savings Plan
You may have heard about the Ontario Home Ownership Savings Plan (OHOSP) as being another government incentive for first-time home buyers. However, this program is proposed to end on December 31, 2005 and new applications are no longer accepted.
FIRST TIME BUYERS FOR NEWLY BUILT HOMES
To continue helping first-time buyers of newly built homes and to promote job creation in the housing industry, the Ontario Government has made the Land Transfer Tax refund program for first-time home buyers permanent. To qualify for a refund:
- you must be at least 18 years old;
- you cannot have previously owned a home, or an interest in a home anywhere in the world;
- your spouse cannot have owned a home, or an interest in a home anywhere while he/she was your spouse;
- you cannot have received an Ontario Home Ownership Savings Plan (OHOSP) based refund of Land
Transfer Tax.
Land Transfer Tax Refund For 1st Time Buyers
The maximum refund is $2,000 and qualifying purchasers must apply for the refund no later than 18 months after registration of the home if they do not receive the refund at the time of registration.
For information about the refund, visit the website of the Ontario Ministry of Finance. All the information provided here on this blog must be re-verified with respective sources, offices, goverments and ministries as rules may get changed anytime. So the readers must not rely all on them.
Sunday, July 11, 2010
Future of Real Estate Market in Canada Post July 2010?
Let me take this opportunity to answer your wonderful question, As far as canadian future real estate market is concerned, it is in my opinion is keeping with the return of a balanced housing market and typical demand-driven housing market cycle dynamics, and prices will remain stable.
We have seen tremendous growth during the last one year. Yes, it has cooled off a bit in terms of volume. It may see some price cooling off in some parts in near future. But Canada’s solid mortgage market trends, conservative lending practices, and prudent borrowing by homebuyers, 250,000 yearly immigrants inflow, record low interest rates means that Canada will susstain a balanced housing supply and demand in near future.
I had the same opinion almost 2 years ago when most of the people and the media were saying that the market is going to crash (Media sometime creates hype and fear and thats how they sell). But because of the the factors as I specified earlier made market to bounce within a span of few months thereafter as we have seen so far.
In general and conclusion, I would enjoy the home ownership at low cost borrowing, instead of waiting for market to lower down and then borrow at higher rates of interest, instead of wasting money on renting. The fact is regardless of anything, everyone needs a home, so either rent it or buy it. The name of the game is even if market slows down a bit in near future, enjoy the home ownership and wait until the market to rebound and sell it if need be.
We have seen tremendous growth during the last one year. Yes, it has cooled off a bit in terms of volume. It may see some price cooling off in some parts in near future. But Canada’s solid mortgage market trends, conservative lending practices, and prudent borrowing by homebuyers, 250,000 yearly immigrants inflow, record low interest rates means that Canada will susstain a balanced housing supply and demand in near future.
I had the same opinion almost 2 years ago when most of the people and the media were saying that the market is going to crash (Media sometime creates hype and fear and thats how they sell). But because of the the factors as I specified earlier made market to bounce within a span of few months thereafter as we have seen so far.
In general and conclusion, I would enjoy the home ownership at low cost borrowing, instead of waiting for market to lower down and then borrow at higher rates of interest, instead of wasting money on renting. The fact is regardless of anything, everyone needs a home, so either rent it or buy it. The name of the game is even if market slows down a bit in near future, enjoy the home ownership and wait until the market to rebound and sell it if need be.
Thursday, May 6, 2010
Is Title Insurance Right For You?
Title insurance is growing in popularity in Canada. But what is it exactly? Should you get it? Do you need it? Whether title insurance is right for you is something you should discuss with your lawyer, as it depends on the circumstances of your transaction. This article will provide you with some background information about title insurance to help you make an informed decision.
Title to Property
-----------------
Title insurance is unlike any other kind of insurance. It is not house insurance which only protects the contents of your home or its structure and for which you have to pay a monthly premium. Rather it protects your ownership to the property and protects you against many factors. Unlike house insurance, you only pay a one-time premium with no deductible. Title insurance usually covers all legal expenses related to restoring title, meaning that you do not have to take time off work and deal with the added stress needed to defend yourself.
Title is the legal term for ownership of property. Buyers want a "good and marketable" title to a property. A good title means that the property is appropriate for the buyer's purposes and a marketable title means the buyer can convey this title to someone else. Public records are usually "searched" before the closing to determine the previous ownership of the property, as well as prior dealings related to it. The search will reveal very valuable information such as existing mortgages, liens for outstanding taxes, and utility charges, that may be registered against the property. The buyer usually expects to buy a property that is free of such claims. This means that such problems must be cleared up before the closing. For example, the seller's mortgage will be discharged and outstanding monetary expenses will be paid for at closing.
However, problems regarding title may not be discovered before closing, or are not remedied before closing. Such defects can make the property less marketable when the buyer tries to sell it and, depending on the nature of the problem, they can also cost money. For example, the survey might have failed to show that a dock and boathouse built on a river adjoining a vacation property was built without legal permission. The buyer of the property could be out-of-pocket if he is later forced to remove the dock and boathouse. Or, the property might have been conveyed to a previous owner fraudulently, in which case there is the risk that the real owner may come forward at some point and demand their rights with respect to the property.
What does the Title Insurance protect?
There are a series of matters which are covered by a title insurance policy that deal with events that occur after the date of the purchase. These include fraud and forgery after the policy date, matters that are obviously not protected by the lawyer’s usual title opinion given effective as of closing. There may also be some cost savings that can be achieved from title insurance.
Title insurance policies can be issued in favour of a purchaser (on new/resale homes, condos and vacation properties), a lender, or both the purchaser and lender. Lenders will sometimes require title insurance as a condition of making the loan. Title insurance is made to protect purchasers and/or lenders against loss or damage sustained if a claim that is covered under the terms of the policy is made.
In addition, there are many types of risks that are usually covered under a title insurance policy such as survey irregularities, forced removal of existing structures, unregistered easements and rights of-way, lack of pedestrian or vehicular access to the property and many more. For a risk to be covered, it has to have existed as of the date of the policy. However, as with any type of insurance policy, there are certain types of risks that might not be covered, such as, native land claims and environmental hazards. Before obtaining a Title Insurance, discuss with your lawyer or real estate agent what risks are covered and what are excluded.
How Long is the Insurance Coverage?
In the case of title insurance covering the purchaser, title insurance remains in effect as long as the insured purchaser has title to the land. Some policies also protect those who received title as a result of the purchaser's death like certain family members to whom the property may have been transferred for a nominal consideration.
In the case of title insurance covering a lender, the policy remains in effect as long as the mortgage remains on title. A lender covered under a title insurance policy is insured under the condition that the lender suffers actual loss or damage with respect to a risk covered under the policy. This means that lenders are usually covered up to the principal amount of the mortgage.
If you feel that Title Insurance is right for you and would like more information, contact me. I shall be more than happy to answer any of your questions and guide you through making a decision.
Title to Property
-----------------
Title insurance is unlike any other kind of insurance. It is not house insurance which only protects the contents of your home or its structure and for which you have to pay a monthly premium. Rather it protects your ownership to the property and protects you against many factors. Unlike house insurance, you only pay a one-time premium with no deductible. Title insurance usually covers all legal expenses related to restoring title, meaning that you do not have to take time off work and deal with the added stress needed to defend yourself.
Title is the legal term for ownership of property. Buyers want a "good and marketable" title to a property. A good title means that the property is appropriate for the buyer's purposes and a marketable title means the buyer can convey this title to someone else. Public records are usually "searched" before the closing to determine the previous ownership of the property, as well as prior dealings related to it. The search will reveal very valuable information such as existing mortgages, liens for outstanding taxes, and utility charges, that may be registered against the property. The buyer usually expects to buy a property that is free of such claims. This means that such problems must be cleared up before the closing. For example, the seller's mortgage will be discharged and outstanding monetary expenses will be paid for at closing.
However, problems regarding title may not be discovered before closing, or are not remedied before closing. Such defects can make the property less marketable when the buyer tries to sell it and, depending on the nature of the problem, they can also cost money. For example, the survey might have failed to show that a dock and boathouse built on a river adjoining a vacation property was built without legal permission. The buyer of the property could be out-of-pocket if he is later forced to remove the dock and boathouse. Or, the property might have been conveyed to a previous owner fraudulently, in which case there is the risk that the real owner may come forward at some point and demand their rights with respect to the property.
What does the Title Insurance protect?
There are a series of matters which are covered by a title insurance policy that deal with events that occur after the date of the purchase. These include fraud and forgery after the policy date, matters that are obviously not protected by the lawyer’s usual title opinion given effective as of closing. There may also be some cost savings that can be achieved from title insurance.
Title insurance policies can be issued in favour of a purchaser (on new/resale homes, condos and vacation properties), a lender, or both the purchaser and lender. Lenders will sometimes require title insurance as a condition of making the loan. Title insurance is made to protect purchasers and/or lenders against loss or damage sustained if a claim that is covered under the terms of the policy is made.
In addition, there are many types of risks that are usually covered under a title insurance policy such as survey irregularities, forced removal of existing structures, unregistered easements and rights of-way, lack of pedestrian or vehicular access to the property and many more. For a risk to be covered, it has to have existed as of the date of the policy. However, as with any type of insurance policy, there are certain types of risks that might not be covered, such as, native land claims and environmental hazards. Before obtaining a Title Insurance, discuss with your lawyer or real estate agent what risks are covered and what are excluded.
How Long is the Insurance Coverage?
In the case of title insurance covering the purchaser, title insurance remains in effect as long as the insured purchaser has title to the land. Some policies also protect those who received title as a result of the purchaser's death like certain family members to whom the property may have been transferred for a nominal consideration.
In the case of title insurance covering a lender, the policy remains in effect as long as the mortgage remains on title. A lender covered under a title insurance policy is insured under the condition that the lender suffers actual loss or damage with respect to a risk covered under the policy. This means that lenders are usually covered up to the principal amount of the mortgage.
If you feel that Title Insurance is right for you and would like more information, contact me. I shall be more than happy to answer any of your questions and guide you through making a decision.
Thursday, January 22, 2009
RENTING VS. BUYING, WHICH IS BETTER?
One thing is for sure; we all know that we need a roof over our head.
In most people’s case they end up having to pay either Rent for this roof or a Mortgage payment, unless of course you have a rich family that can offer you FREE or Reduced Rent. The point is, we ALL have to pay for a roof over our heads. Real Estate has always been considered a Long-Term Investment. The real question you need to ask yourself; do I really want to pay RENT for the rest of my life? Generally, a home makes financial sense if you are going to live in it for at least three, four, or preferably five years. When you buy you need to take into consideration the costs involved in buying and selling a home, from appraisal fees and home inspection to real estate commissions, all must be taken into consideration.
When people lose money in the real estate market it is usually because they did not own it long enough, they sold to quickly. This usually means within the first 3 years of the purchase. You cannot depend on making any real profit in real estate in the first 3 years. In fact, the market may fall after you buy your home. However, also keep in mind; the longer you own your property, history has shown us, you can be sure it will have increased in value when you come to sell.
Real estate has proven to be one of the most stable long-term investments there is. It is your guarantee of retirement security. Overall, it is far better to own your own home than rent. Not only for the pride of ownership but because it is your only long-term hedge against inflation. With rental rates increase constantly, there is no guarantee you will be able to afford them as the years go by.
In most people’s case they end up having to pay either Rent for this roof or a Mortgage payment, unless of course you have a rich family that can offer you FREE or Reduced Rent. The point is, we ALL have to pay for a roof over our heads. Real Estate has always been considered a Long-Term Investment. The real question you need to ask yourself; do I really want to pay RENT for the rest of my life? Generally, a home makes financial sense if you are going to live in it for at least three, four, or preferably five years. When you buy you need to take into consideration the costs involved in buying and selling a home, from appraisal fees and home inspection to real estate commissions, all must be taken into consideration.
When people lose money in the real estate market it is usually because they did not own it long enough, they sold to quickly. This usually means within the first 3 years of the purchase. You cannot depend on making any real profit in real estate in the first 3 years. In fact, the market may fall after you buy your home. However, also keep in mind; the longer you own your property, history has shown us, you can be sure it will have increased in value when you come to sell.
Real estate has proven to be one of the most stable long-term investments there is. It is your guarantee of retirement security. Overall, it is far better to own your own home than rent. Not only for the pride of ownership but because it is your only long-term hedge against inflation. With rental rates increase constantly, there is no guarantee you will be able to afford them as the years go by.
Friday, May 16, 2008
Buying a Home? Take Charge and Be in the Pilot Seat!
Does the idea of buying a home seems overwhelming to you? Do you always ask yourself questions like; How much can I afford?, How can I find the best loan? Should I buy a new or a resale home? Should I use an agent or look at homes on my own? and many others questions?
We agree, buying a home is one of the major decisions that you will make in life and is one of the largest financial transactions in your lifetime. But, don't worry, although there is much to consider when buying a home, if you do your research and approach the home buying process with confidence, you will most likely buy a house that you will be proud to call home.
Below are the three most important things to remember no matter where you are on the road to home ownership. If you follow them closely, you will be happy with the end result!
1. Understand the home buying process. When buying a home, there is nothing that is complex that can't be easily explained to anyone. If you don't apply for a thirty year mortgage once a week, don't take the first one that comes along. You'll need to do your research, learn some new terms, apply some new concepts, and take the time to understand the entire process. If something happens at any point that you don't understand, simply demand a full and complete explanation from someone you trust like your real estate agent, CPA or your lawyer.
2. Become the important person in the process.
In the world of real estate sales, YOU are the most important person in the home buying process. It's easy to think that everyone else carries more weight than you but that's not the reality. The seller owns the house and has all the money and the real estate agent tries to sell the house for the seller. However, you, the buyer, are the one person in the transaction that makes it all happen. This entire process could come to a stop if you decide to not buy. So why not take command of this process?
3. Surround yourself with a team of professionals that you trust and make them work for you.
Good Realtors, mortgage specialists and property lawyers are some people that you can count on to help you. They all save you time and money. They know your community, they know what is important when buying and selling a home, and they know all the intricacies of the process, from finding a home, to negotiating a price, to closing a deal and to ensuring the paperwork is done right.As you can see, if you approach the home buying with intelligence and confidence, you are more likely to buy a house you’re happy with and know that you made the right decision. When you start to walk down this road, take charge from the first step and be in the pilot seat to ensure you satisfaction. Remember, YOU are the most important person in this process!
We agree, buying a home is one of the major decisions that you will make in life and is one of the largest financial transactions in your lifetime. But, don't worry, although there is much to consider when buying a home, if you do your research and approach the home buying process with confidence, you will most likely buy a house that you will be proud to call home.
Below are the three most important things to remember no matter where you are on the road to home ownership. If you follow them closely, you will be happy with the end result!
1. Understand the home buying process. When buying a home, there is nothing that is complex that can't be easily explained to anyone. If you don't apply for a thirty year mortgage once a week, don't take the first one that comes along. You'll need to do your research, learn some new terms, apply some new concepts, and take the time to understand the entire process. If something happens at any point that you don't understand, simply demand a full and complete explanation from someone you trust like your real estate agent, CPA or your lawyer.
2. Become the important person in the process.
In the world of real estate sales, YOU are the most important person in the home buying process. It's easy to think that everyone else carries more weight than you but that's not the reality. The seller owns the house and has all the money and the real estate agent tries to sell the house for the seller. However, you, the buyer, are the one person in the transaction that makes it all happen. This entire process could come to a stop if you decide to not buy. So why not take command of this process?
3. Surround yourself with a team of professionals that you trust and make them work for you.
Good Realtors, mortgage specialists and property lawyers are some people that you can count on to help you. They all save you time and money. They know your community, they know what is important when buying and selling a home, and they know all the intricacies of the process, from finding a home, to negotiating a price, to closing a deal and to ensuring the paperwork is done right.As you can see, if you approach the home buying with intelligence and confidence, you are more likely to buy a house you’re happy with and know that you made the right decision. When you start to walk down this road, take charge from the first step and be in the pilot seat to ensure you satisfaction. Remember, YOU are the most important person in this process!
Tuesday, May 13, 2008
How to save for a down payment???
Owning your own home has a lot of payoffs, especially these days when mortgage rates are still among the lowest in 30 years. There are also many housing options available in a wide range of prices.
Simply put, you can carry a home of your own for no more than what you would pay in rent. And, unlike renting, your payments go toward increasing the equity in your home.
So, what's stopping you? For most people who have never owned a home before, it's the initial down payment and the ability to keep up with the monthly financial obligations (mortgage payment, insurance, utilities, maintenance).
The effort to save for and buy a home may require you to make significant changes in your way of life. For most people, it means changing their spending and lifestyle habits to support the additional costs of saving for, paying for, and maintaining a home.
One of the best ways of saving for a down payment is to take advantage of government programs available to first-time home buyers. A real estate professional can help you understand how these programs work and ensure that you get the maximum benefit possible.
RRSP Home Buyers' PlanContribute to a Registered Retirement Savings Plan (RRSP) regularly and to the maximum allowed. The federal government's RRSP Home Buyers' Plan enables eligible taxpayers to withdraw up to $20,000 tax free from their plan to buy or build a qualifying home. The amount of money withdrawn must be repaid within 15 years.
If you buy the qualifying home together with your spouse or other individuals, each person can withdraw up to $20,000 tax free. A government form must be completed for each withdrawal.
Generally, an RRSP holder can participate in the Home Buyers' Plan only once in a lifetime. The pamphlet, Home Buyers' Plan (HBP) - For 1998 Participants, is available from Revenue Canada and will help you determine if you are considered a first-time home buyer.
A qualifying home is a housing unit located in Canada. Those participating in 1998 have to buy or build a home before Oct. 1, 1999. You must also agree to occupy the home as your principle residence no later than one year after buying or building it. Once you occupy the home, there is no minimum period of time that you have to live there.
Ontario Home Ownership Savings Plan(OHOSP) OHOSP is a provincial program where participants receive interest on the money they deposit and may receive a tax credit. If you earn less than $40,000 a year, or if you and your spouse have a combined income of less than $80,000, you can benefit from the program. To be eligible, you must be an Ontario resident over 18 years of age with a social insurance number and have never owned a home.
While there is no limit to the amount of money you may deposit in your OHOSP, you can only receive OHOSP tax credits on annual contributions of $2,000 ($4,000 per couple) or less. Depending on your annual income and the amount of money you invest, you can earn up to $500 individually or $1,000 a couple in OHOSP tax credits. Participants are eligible for tax credits for five consecutive years and must close the plan and use the funds to purchase a home by the end of the seventh year. Otherwise, OHOSP tax credits must be repaid with interest.
An OHOSP plan, with interest earned at competitive rates, may be opened at any participating financial institution. To qualify, a home must be located in Ontario and be suitable for year-round residential occupancy. In addition, you must live in the home for at least 30 consecutive days within two years of the date of purchase.
CMHC five per cent downWhile Canada Mortgage and Housing Corporation's (CMHC) five per cent down option program doesn't help you save for the down payment, it sure eases the way to home ownership.
With as little as five per cent down, all home owners now have access to CMHC mortgage insurance. This means CMHC may insure the mortgage on your home (against default in payments) for up to 95 per cent of the lending value of the home. This helps make home ownership a reality for many Canadians who can afford monthly mortgage payments but would have trouble saving for a larger down payment.
Previously available only to first-time home buyers, the program was expanded earlier this year to include all home buyers. Eligible borrowers include anyone who buys a home in Canada and occupies it as a principle residence. The mortgage insurance premium in 1998 is about 3.75 per cent of the mortgage loan and can be added to the mortgage or paid on a monthly basis.
Let me know if you have any question or comments for me or you want to get more details on it.
-Source OREA
Simply put, you can carry a home of your own for no more than what you would pay in rent. And, unlike renting, your payments go toward increasing the equity in your home.
So, what's stopping you? For most people who have never owned a home before, it's the initial down payment and the ability to keep up with the monthly financial obligations (mortgage payment, insurance, utilities, maintenance).
The effort to save for and buy a home may require you to make significant changes in your way of life. For most people, it means changing their spending and lifestyle habits to support the additional costs of saving for, paying for, and maintaining a home.
One of the best ways of saving for a down payment is to take advantage of government programs available to first-time home buyers. A real estate professional can help you understand how these programs work and ensure that you get the maximum benefit possible.
RRSP Home Buyers' PlanContribute to a Registered Retirement Savings Plan (RRSP) regularly and to the maximum allowed. The federal government's RRSP Home Buyers' Plan enables eligible taxpayers to withdraw up to $20,000 tax free from their plan to buy or build a qualifying home. The amount of money withdrawn must be repaid within 15 years.
If you buy the qualifying home together with your spouse or other individuals, each person can withdraw up to $20,000 tax free. A government form must be completed for each withdrawal.
Generally, an RRSP holder can participate in the Home Buyers' Plan only once in a lifetime. The pamphlet, Home Buyers' Plan (HBP) - For 1998 Participants, is available from Revenue Canada and will help you determine if you are considered a first-time home buyer.
A qualifying home is a housing unit located in Canada. Those participating in 1998 have to buy or build a home before Oct. 1, 1999. You must also agree to occupy the home as your principle residence no later than one year after buying or building it. Once you occupy the home, there is no minimum period of time that you have to live there.
Ontario Home Ownership Savings Plan(OHOSP) OHOSP is a provincial program where participants receive interest on the money they deposit and may receive a tax credit. If you earn less than $40,000 a year, or if you and your spouse have a combined income of less than $80,000, you can benefit from the program. To be eligible, you must be an Ontario resident over 18 years of age with a social insurance number and have never owned a home.
While there is no limit to the amount of money you may deposit in your OHOSP, you can only receive OHOSP tax credits on annual contributions of $2,000 ($4,000 per couple) or less. Depending on your annual income and the amount of money you invest, you can earn up to $500 individually or $1,000 a couple in OHOSP tax credits. Participants are eligible for tax credits for five consecutive years and must close the plan and use the funds to purchase a home by the end of the seventh year. Otherwise, OHOSP tax credits must be repaid with interest.
An OHOSP plan, with interest earned at competitive rates, may be opened at any participating financial institution. To qualify, a home must be located in Ontario and be suitable for year-round residential occupancy. In addition, you must live in the home for at least 30 consecutive days within two years of the date of purchase.
CMHC five per cent downWhile Canada Mortgage and Housing Corporation's (CMHC) five per cent down option program doesn't help you save for the down payment, it sure eases the way to home ownership.
With as little as five per cent down, all home owners now have access to CMHC mortgage insurance. This means CMHC may insure the mortgage on your home (against default in payments) for up to 95 per cent of the lending value of the home. This helps make home ownership a reality for many Canadians who can afford monthly mortgage payments but would have trouble saving for a larger down payment.
Previously available only to first-time home buyers, the program was expanded earlier this year to include all home buyers. Eligible borrowers include anyone who buys a home in Canada and occupies it as a principle residence. The mortgage insurance premium in 1998 is about 3.75 per cent of the mortgage loan and can be added to the mortgage or paid on a monthly basis.
Let me know if you have any question or comments for me or you want to get more details on it.
-Source OREA
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