I hope all is well and that you’re having a great start to 2019. Thank goodness we are hopefully past the worst of the cold. I just wanted to reach out to you as you may yourself be looking at buying your first home or may know someone that is wanting to purchase in 2019 but may still be in “saving mode”.
FIRST TIME HOME BUYERS!
First time home buyers don’t always know all of the facts and perks of being a first time home buyer. If they are not putting money in an RRSP or do not have an RRSP account yet they may be missing out on some great benefits that could get them into home ownership 6-12 months faster just by working with an experienced mortgage broker like myself.
RRSP TO SAVE
RRSP accounts are a retirement savings accounts that generally is money you invest now and have accessible to you in your later years. The one major exception to this rule is made for first time home buyers or folks who haven’t owned a home in 4+ years.
The key benefit to putting money into an RRSP in your younger working years is that money contributed to these accounts provide you with some income tax relief when you file your annual income taxes with Canada Revenue Agency.
TWO key rules for RRSP and first-time buyers to note:
-A maximum of 25k can be pulled from an RRSP account.
-Funds deposited must sit in the RRSP account for 90 days to be able to get the full tax benefits.
Here is an example of what it might look like
Your annual income $80,000.00 Your annual income tax % paid 36%
Purchase price you want $300,000.0
1% of 300k to cover lawyers, moving costs etc. $3,000.00
5 % down payment needed $15,000.00
Total funds needed $18,000.00
IF YOU JUST KEEP SAVING AND NO RRSP CONTRIBUTION
Money you have saved so far $12,000.00
Amount you are saving monthly $500.00
Time needed to save: 3k down + 3k costs 12 months
March 2020 – ready to buy $18,000.00
INVEST SAVED FUNDS TODAY INTO RRSP + KEEP SAVING
Invest amount into RRSP $12,000.00
Income Tax Refund (12k x 36% income tax rate) $4,320.00
ADD saved monthly $500 x 120 days $2,000.00
June 2019 – ready buy $18,320.00
Please note this is a scenario. Please chat with your accountant or tax professional to confirm your exact returns to expect.
This could get you into your home this summer! Vs possibly saving until next year.
PLANNING YOUR HOME BUYING IS IMPORTANT
Even if you do not have a lot of saved money yet there are still options that allow you to borrow money to put into the RRSP account! Call me to get more info on this. 587-432-7653
The key thing to note is that the last day to contribute money into an RRSP and have it count towards your 2018 tax year is March 1, 2019. It is key that we speak very soon and that is coming up on 1 week!
Contact me today to get more information catering to your specific needs, to update your pre-approval and get you ready to become a home owner in 2019! 587-432-7653
If you know of anyone in need of this information, please feel free to forward this email. I will pay you a generous referral fee!
I’m never too busy for you, your friends or family members. Referrals are the backbone of my business and your support is always appreciated. My goal is to make them as happy as you were with my service.
Zoltan J. Padar realtor | mortgage professional | investor
MortgagePRO Ltd. 587-432-7653