RRSP – USE HOME BUYERS’ PLAN (HBP) MORE THAN ONCE
Under the home buyers’ plan, a participant and his or her spouse or common- law partner is allowed to withdraw up to $25,000 from his or her RRSP to buy a home. Before 1999, only the first- time home buyers are permitted to buy a home under this plan. Now a person can take an advantage of HBP plan more than one, two, three, four or more times as long as the participant in this plan fulfills all other conditions. The house can be existing or can be built.

Are you a first – time home buyer?
You are considered a first-time home buyer if, in the four year period, you did not occupy a home that you or your current spouse or common-law partner owned. The four-year period begins on January 1st of the fourth year before the year you withdraw funds and ends 31 days before the date you withdraw the funds.
For example, if you withdraw funds on March 31, 2018, the four-year period begins on January 1, 2014 and ends on February 28, 2018.
If you have previously participated in the HBP, you may be able to do so again if your repayable HBP balance on January 1st of the year of the withdrawal is zero and you meet all the other HBP eligibility conditions.
Qualifying home – a qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings all qualify. A share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in a housing unit located in Canada, also qualifies.

Repayment of withdrawal amount into RRSP
Generally, you have up to 15 years to repay to your RRSP, the amounts you withdrew from your RRSP(s) under the HBP. However, you can repay the full amount into your RRSP(s)
Each year, the Canada Revenue Agency (CRA) will send you a Home Buyers’ Plan (HBP) statement of account, with your notice of assessment or notice of reassessment.
The statement will include:
• the amount you have repaid so far (including any additional payments and amounts you included on your income tax and benefit return because they were not repaid);
• your remaining HBP balance; and
• the amount you have to contribute to your RRSP and designate as a repayment for the following year.

If you have any questions contact a Dominion Lending Centres Mortgage Professional near you.

GURCHARAN SINGH
Dominion Lending Centres – Accredited Mortgage Professional

Read the following article, posted by one of our bloggers from Dominion Lending Centres:

5 WAYS YOU CAN KILL YOUR MORTGAGE APPROVAL
So, you found your dream home, negotiated a fair price which was accepted. You supplied all the needed documentation to your mortgage broker and you are waiting for the day that you go to the lawyer’s to sign the final paperwork and pick up the keys.

All of a sudden your broker or the lawyer calls to say that there’s a problem. How could this be? Everything has been signed and conditions have been removed. What many home buyers do not realize is that your financing approval is based on the information the lender was provided at the time of the application. If there have been any changes to your financial situation, the lender is within their rights to cancel your mortgage approval. There are 5 things that can make home financing go sideways.

1 Employment – You were working for ABC company as a clerk for 5 years making $50,000 a year and just before home possession you change jobs. The lender will now ask for proof that probation for this new job is waived and new job letters and pay stubs at the very least. If you change industries they will want to see more proof that you are capable of keeping this job.
If your new job involves overtime or bonuses of any kind that vary over time, they will ask for a 2 year average which you will not be able to provide.
Another item that could ruin your chances of getting the mortgage is if you decide to change from an employee to a self-employed contractor just before possession day. Even though you are in the same industry, your employment status has changed . This is a big deal killer.

2. Debt – A week or two before your possession date, the lender will obtain a copy of your credit report and look for any changes to your debt load. Your approval was based on how much you owed on that particular date. Buying a new car or items for the new home need to be postponed until after possession of your new home.
Don’t be fooled by “Do not pay for 12 months” sales campaigns. You now owe this money regardless of when the payments start. Don’t buy a new car and don’t buy furniture for the new home. This will increase your debt ratio and can nullify your financing.

3. Down payment source – And yet again I reiterate that the approval is based on the initial information you have provided. You will be asked at the lawyer’s office to verify the source of the down payment and if it is different than what the lender has approved, then you may be in trouble. For example, you said that you were going to save the funds and then at the last minute Mom and Dad offer you the funds as a gift. There’s no problem accepting the gift if the lender knows about it in advance and has included this in their risk assessment, but it can end a deal.

4. Credit – Don’t forget to make your regular credit card payments. If your credit score falls due to late payments, this can kill your financing. If you have a high ratio mortgage in place which required CMHC insurance, a lower credit score could mean a withdrawal of their insurance once again , killing the deal.

5-Identity Documents – This can be a deal killer at the lawyer’s office. The lawyer is required to verify your identity documents and see that they match the mortgage documents. Many Canadians use their middle names if they have the same name as their parent. Lots of new Canadians adopt a more Canadian sounding name for their day-to-day lives but their passports and other documents show another name.

Be sure to use your legal name when you apply for a mortgage to avoid this catastrophe . Finally, keep in touch with your Dominion Lending Centres mortgage professional right up to possession day. Make this a happy experience rather than a heartbreaking one.

David Cooke

Dominion Lending Centres – Accredited Mortgage Professional