Mortgage brokers weigh in on key RRSP strategies
Once again, RRSP season is upon us. At this time of year, Canadians grapple with issues about finding money to contribute, deciding what to invest in, and determining whether to forfeit the RRSP contribution in lieu of the 'saving for a house fund'. The experts at Invis, Canada's largest mortgage brokerage firm, offer the following suggestions:
Short on money? Consider your home equity to maximize your RRSP contribution.
Higher real estate values are offering a unique chance for many to maximize their RRSP contributions by tapping into existing home equity. Of the almost $491 billion in RRSP room available to Canadians in 2005, only $71 billion was actually used, according to Statistics Canada. With a home equity line of credit, a homeowner can withdraw funds at relatively low interest rates on an as needed basis for the purpose of increasing RRSP contributions, including unused contributions from previous years.
Planning to buy a home in 2007? Make a contribution to your RRSP.
Contribute to your RRSP then use up to $20,000 ($40,000 per couple) of your plan's accumulated assets to purchase or build a home. Under the Home Buyers' Plan (HBP), the Canada Revenue Agency lets first time homebuyers access their retirement savings without tax consequences. Funds in your RRSP from previous years may be accessed right away. Contributions made to your RRSP by March 1, 2007 can be withdrawn after a period of 90 days, and the resulting tax refund can be used towards a down payment.
An Invis Mortgage Consultant can explain ways to make the most of your mortgage or maximize your down payment this RRSP season. Contact Invis today to access all your mortgage options.
Courtesy of Jim Rawson of Invis Mortgage, 416-972-6336 ex. 30 e-mail
Looking for a Home with Confidence
The busiest time of the year for home buying typically begins in February and lasts through to June. Having a pre-approval arranged before you start house hunting makes sense, as you will be aware of how much of a home you can afford, and you will be assured of a specific mortgage rate for a set period.
Buying a property in Toronto: The Home Buyers Plan
If you are a first-time homebuyer, with the Home Buyer's Plan you may be eligible to withdraw funds from your registered retirement savings plan (RRSP) for a down payment when buying or building a qualifying home. Under the program you can withdraw up to $20,000 (or, up to a maximum of $40,000 per couple) without tax penalties.