Monday, January 14, 2008

RRSP strategy: Creating a down payment

Thinking about buying your first home but you don’t have a down payment? Here’s an RRSP strategy you can use to create one. By taking an RRSP loan and buying RRSP’s, you’ll get a tax refund once you file your taxes. The refund is found money you can use as a down payment for your new home.

If a husband and wife each buy $18,000 in RRSP's, the total refund could be as much as $16,500 -- you should talk to your accountant first to determine exactly how this will work out for you. On a $300,000 house purchase, that’s enough for a five percent down payment, plus you’ll have some money left over to put toward closing costs!

After 90 days, can you withdraw the funds from the RRSP under the provinces Home Buyers Plan and you don’t have to pay tax on the withdrawal. At that point, you can repay the RRSP loan. You have fifteen years to put the money back into the RRSP, which for most people shouldn’t be too difficult.

Call me at 416 876 2031 or call Steve Notis from Investor's Group at 647 200 7308 for more information. I can prequalify you for the mortgage, Steve can get the RRSP and the RRSP loan set up for you.