Welcome back and thanks for coming back to check out Part 3 of Insider Tips for First Time Home Buyers.
This tip is all about the incentives you should be taking advantage of – Let’s check them out!
The first incentive you will take advantage of is the credit towards your land transfer tax. You’re entitled to up to $4,000!
Incentive number two is your income tax rebate of up to $750. You will actually get a credit on your taxes of up to $750 of the year that you purchased your home.
When you’re shopping around for mortgage, a lot of financial institutions have programs geared specifically to the first-time home buyers. It could be something like a reduced rate, rebate, or a gift card of some sort to a store that might help you furnish your new home. Keep in mind that rebates and gift cards can come at the expense of a higher rate, so make sure do your research.
Last but not least is the RRSP Home Buyers’ Plan. This allows you to withdraw up to $25,000 per person for your down payment on your FIRST home. It’s a great way to get your down payment for your home. You can repay it in equal instalments over 15 years, interest-free! Lots of people struggle to save that down payment (don’t worry, you’re not alone), so if you haven’t been using your RRSPs, consider taking out a an RRSP loan and fill up your RRSPs. It’s a huge tax savings on your income tax that year as well. After 60 days of being in the account, you can pull it out for your down payment. It’s a great way of getting a good ROI and RRSP loans are pretty easy to get because they’re secured against the RRSP. BUT if you do get an RRSP loan, make sure that the mortgage gets approved taking that into account.
You definitely don’t want to screw up your credit rating before closing and you don’t want to have your debt servicing too high and then not get a mortgage because of your RRSP loan.
Stay tuned for the next part in the Insider Tips for First Time Buyers series. To ensure you don’t miss out, LIKE us on Facebook where we post these first.