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 Home Buyers’ Plan. This allows you to withdraw up to $35,000 per person for the downpayment on your FIRST home. You repay it in equal instalments over 15 years, interest-free!
Many people struggle to save a down payment. If you haven’t been using your RRSPs, consider topping up your RRSPs by taking out an RRSP loan in advance. After your funds have been in the account for 60-days, you can withdraw those them for your purchase. It’s a great way of getting a good ROI, there are income tax savings and RRSP loans are pretty easy to get. 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.