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Posts tagged ‘Housing Starts’

16
Jun

Land Transfer Tax

How much is the land transfer tax in your province?

Canada map

Land Transfer Tax

Each province has a land transfer tax, with the exception of Alberta and Saskatchewan. Ontario, British Columbia, Prince Edward Island and the city of Toronto offer land transfer tax rebates for first-time homebuyers. Considering purchasing some property? Be sure to review land transfer taxes when completing your budget and considering your Canadian mortgage rate.

Ontario first-time homebuyer land transfer tax rebate

Equal to the full value of the land transfer tax up to a maximum of $2,000.

Eligibility

The buyer must be older than 18 years, occupy the home within nine months of purchase, and has not owned a home anywhere else the world.

Purchasing a home in Toronto incurs an additional municipal land transfer tax.

Toronto first-time homebuyer land transfer tax rebate

Eligible to receive a refund up to a maximum of $3,725.

Eligibility

The buyer must be older than 18 years, occupy the home within nine months of purchase, and has not owned a home anywhere in the world.

British Columbia first-time homebuyer land transfer tax rebate

First-time homebuyers and best mortgage rate holders are eligible to receive a full land transfer tax refund on homes purchased for $425,000 or less.

Eligibility

You are Canadian citizens or permanent residents, have never owned an interest in a principal residence anywhere in the world at anytime.

Alberta and Saskatchewan land title transfer fees

Though Alberta and Saskatchewan do not have a land transfer tax, there is a charge for title transfer fees. This fee should be considered when calculating your low mortgage rate and closing costs.

9
Jun

Preparing For Your First Mortgage

Four moves to make when getting ready for your first mortgage.

Happy couple holding for sale and sold signs in front of a new house

You First Mortgage

Step 1: Know What You Want

Should your mortgage be fixed or variable?

Fixed Mortgage Rate:

Enables you to “lock in” a predetermined rate for a set amount of time (term).

Variable Mortgage Rate:

This type of mortgage rate changes monthly according to the mortgage lender’s prime rate. Anyone handling a variable Canadian mortgage rate has to have the ability to manage modifications to their monthly payments.

Open or Closed Mortgage?

If you are not prepared to pay a sizable lump sum in the coming future, typically a closed mortgage would be the best option for you.

Open Mortgage:

An open mortgage is a versatile alternative that enables you to make substantial payments or settle the whole mortgage without a penalty. Open mortgage rates are more than closed mortgage rates. This form of mortgage allows you to settle large amounts of your loan prior to completion of the mortgage term.

Closed Mortgage:

Not too many individuals need the flexibility to settle their best mortgage rate prior to completion of the term. If you have a closed mortgage you are going to be penalized if you try to pay off the loan early and the charge can be rather substantial.

Step 2: Knowledge is Power!

Searching for the best rates can save you money on your low mortgage rate.

Step 3: Speak with a Mortgage Broker

Brokers are able to assist in determining what you will be able to manage, what your options are, and help you through the process.

Step 4: Discuss Your Mortgage

As soon as you have prepared, you are ready to put your mortgage broker to work by having them negotiate a rate.
Take the first step towards homeownership now. Get pre-approved for a low mortgage rate.

9
Jun

Should I Rent Or Buy?

Are you ready to take the leap into homeownership?

female teen girls holding notepad with pros cons

Pros and Cons

Weighing out the pros, cons, costs, and considerations is the best way to help you determine if you are ready to own a home.

Renting

Pros

Renting is a wonderful first step to living on your own. Given that it lacks long term commitment many rental agreements generally only last one year. Renting is an affordable and accommodating option for most people.

Cons

You’re essentially paying off someone else’s Canadian mortgage rate, as opposed to investing in your future. In addition to this, your rental agreement will have its own set of rules that you will be required to follow during your tenancy.

Buying

Pros

The current best mortgage rates enable you to borrow money cheaply right away. Furthermore, owning a home will help to provide you with a sense of security and comfort. You have freedom to update it as you please and improve on your investment.

Cons

You will need to be personally and financially prepared for homeownership. Expect your stress levels to increase given your monthly budget.

Costs

Renting

Renting provides low initial costs. Your costs are a predictable expense and thus easy to budget around.

Buying

Saving up for a down payment requires substantially more money. Also, there are hidden expenses that turn up unexpectedly.

Finally, if you secure a low mortgage rate today, you will need to keep in mind that your payments may go up when it comes time to refinance.

Investment

Renting can be considered an investment if the money that you’re saving is going towards a future down payment. Buying a home can be considered a good investment only if the property value increases. It could also provide a possible source of income if you choose to rent out a room or convert the basement into an income suite.
Buying a home is a big investment. Make sure you’re ready to make the commitment. Contact a mortgage broker to learn more about the pros and cons of homeownership.

9
Jun

Should I Use RRSPs For A Down Payment?

Bulk up your down payment with help from your Registered Retirement Savings Plan.

Loan App

Loan Application

The Home Buyers’ Plan (HBP) is a program from the Government of Canada that allows first time home buyers to withdraw up to $25,000 from their RRSP towards their Canadian mortgage rate down payment for their first home, tax free.

How Does the Home Buyer’s Plan Work?

You can use your RRSP to help buy a new home, but in order to ensure the withdrawals are tax free, there are a number of conditions and requirements that apply.

1. You must be a first time home buyer, and a Canadian resident
To participate in the Home Buyers’ Plan (HBP) for your best mortgage rate, you must be a first time home buyer and a resident of Canada at the withdrawal time. You may only be considered as a first time home buyer if you, and / or your spouse haven’t owned and lived in a primary residence for at least four years before the date of the RRSP withdrawal.

2. You and your partner can both withdraw up to $25,000.
If you are purchasing the home with a spouse, you can both withdraw $25,000 each from your RRSP accounts under the Home Buyer’s Plan. This means you could potentially have up to a total of $50,000 towards your first home, reducing your mortgage rate amount and payments, along with overall interest requirements.

3. The deal must close within one year.
The home must be purchased or built within one year of the withdrawal to apply for the Home Buyer’s Plan.

4. You have up to fifteen years to repay the amount
You have up to fifteen years to repay the amount you withdrew starting the second year after you made the withdrawal. Each year, you must pay a minimum of 1/15 of the withdrawn amount. For example, if you withdrew $15,000, then each year you would have to pay back $1,000 to your RRSP. If you skip a payment, then the payment amount will be counted as income and you will need to pay taxes on it.

Restrictions of the Home Buyer’s Plan
Any RRSP contributions made less than 90 days before the withdrawal date cannot be used towards the Home Buyer’s Plan.