Mortgage Alliance of Canada

Mortgage Brokers/Consultants Get You the Best Mortgage Deal

2008-06-03T03:43:00.000-07:00

In the past, mortgage brokers were used by individuals who may not have been able to get credit through other channels. They would arrange hard-to-qualify mortgages for a fee. Today this is not the case. The number of mortgage brokers who work hard-to-place mortgages is now only a very small portion of the market. In addition to searching out the lowest rate, mortgage brokers now focus on a consulting role showing consumers how to become mortgage-free quicker, how to decide between terms, conditions, and how to crunch the numbers on the many mortgage gimmicks in the marketplace.

Mortgage brokering or mortgage consulting is not a new industry, but is one that has been experiencing explosive growth over the last five to 10 years. As it stands currently, more than 21 per cent of all mortgage business in Canada is originated through mortgage brokers. Visiting the four banks in your neighborhood is not going to cut it any more. One of the biggest differences between the person you may deal with at your financial institution versus a mortgage broker is that the broker works for you, not one financial institution.

How do they get these rates? One of the advantages that the mortgage broker has is access to volume discounts that the consumer typically doesn't get. When a mortgage broker sends a significant amount of business to various lenders every month, those lenders are going to make sure that they work to keep the relationship strong. The financial institutions do not have to gather the paperwork, pay a salaried employee, or maintain an expensive branch infrastructure. By using mortgage brokers to generate mortgage business, they only have to pay the individuals that are producing deals. This is a win-win situation for all those involved.

How to Compare Adjustable-Rate Mortgage

2008-05-16T03:47:00.000-07:00

When comparing adjustable-rate mortgages, it first by comparing the effective prime discount (or cost of borrowing) that requires a relatively complex financial calculations (for the average consumer). Second, is to compare the privileges and features, you have to understand what they all mean, as well as know the right questions to ask.

Know how the rate changes will affect your payments. Some adjustable-rate mortgages have payments that adjust as prime moves, while others do not. When prime goes up and your payment stays the same, then the portion of your mortgage payment that goes towards the principal is decreased. This means that your amortization period is also extended.

Before you sign for the biggest loan that you will likely ever have in your life, here are some things that you should definitely know in advance (and, as always, get them in writing). Take the time to determine your average cost of borrowing until the mortgage becomes open (or renews). The low introductory teaser rates currently offered may actually make it beneficial for you to switch institutions every few years. To effectively compare the rates offered on ARMs, you need to determine the average cost of borrowing for the period until the mortgage becomes fully open (or renews). To do this, you need to do a weighted average calculation that will give you the effective cost of borrowing.

Weighted average calculation can be done by:
a - multiplying the introductory rate by the number of months in is in effect
b - multiplying the rate after the introductory period by the number of months until the mortgage becomes open (or renews)
- taking the total from (a) and (b) and then devide this number by the total number of months in (a) and (b)

New Delayed Closing Warranty Effective July 1, 2008

2008-04-23T17:45:00.000-07:00

Tarion Warranty Corporation announced that effective July 1, 2008, Ontario consumers who purchase a new home or condominium unit will benefit from the most comprehensive warranty protection against delays in closing or occupancy that is available anywhere in Canada.

Among the benefits to new home buyers of the new home warranty provisions are:

A new standard form information statement will be required in every Agreement of Purchase & Sale for a new home (known as “the Addendum”), which will outline for consumers the closing details in clear language, including disclosure of critical information about the current status of the property being purchased;
The Addendum will feature a cover page that lists each important date related to a home’s closing or occupancy;
Builders will be required to disclose key information at the time of purchase, such as when construction is scheduled to start, whether a building permit has been issued, whether sewer and water services are currently available, as well as any conditions precedent that must be met in order to complete the contract. This information will assist consumers to better understand whether a delay in closing is probable, and will assist consumers to manage their own affairs, including the timing of the sale of their current home; and
A 50 percent increase in compensation for home buyers who experience a legitimate delay in closing, raising total compensation to $7,500.00 from $5,000.00

For more information go to http://www.cmhc-schl.gc.ca/

New Home Warranty Coverage

2008-04-20T17:31:00.000-07:00

All new homes in Ontario are covered by a statutory warranty. Tarion guarantees this warranty and serves as the Regulators of the new home building industry. Ontario new home buyers are protected against loss of deposits up to $40,000 should the sale of their home not be completed through no fault of their own. This applies to freehold and contract home buyers who signed an Agreement of Purchase and Sale (APS) on or after February 1, 2003. Buyers who signed an APS before February 1, 2003 are covered for up to $20,000.

Tarion also offers free new home buyers seminars. This seminar helps prepare you for the process of house hunting, You'll learn about your warranty rights as a new home buyer and get helpful hits from mortgage specialists and real estate lawyers. You will learn the process of working with the builder and when to call on the warranty experts at Tarion for advice or assistance.

For more information go to http://www.tarion.com

40 Year Loans Hold Dangers for Homeowners

2008-04-09T03:12:00.000-07:00

The popular 40-year loans hold dangers for homeowners that aren't always stated, this means that you have less chance of being debt-free in retirement or retiring early. It's a recipe for not going into retirement and extending your time in the workforce. Homeowners would not be able to build equity in their home for many years. Many buyers could owe more than the value of their properties if there's a period of slow growth or recession. They would have no equity to borrow against, and nothing to fall back on, if they lost their jobs and couldn't pay their mortgages.

Building equity takes a long time, even with a conventional 25-year loan. Suppose you have a $200,000 mortgage amortized over 25 years, with a five-year term at 7.19 per cent (the current posted rate at big banks). Your payments are $1,424.37 a month, or $17,092.44 a year. Only by year 16 do you reach the point where more than half your payments go to principal, not interest.

Now let's take that $200,000 mortgage and amortize it over 40 years, with a five-year term at 7.19 per cent. Your payments go down to $1,255.17 a month, or $15,062.04 a year. But only by year 31 will you be paying more principal than interest.

You may owe more than what the house is worth if there's an economic decline. Suppose you put little or no money down when you buy a house. You have to buy mortgage default insurance, which adds 2.7 per cent to 3.1 per cent to the loan amount. Spreading the payments over 40 years will boost the cost of mortgage insurance.

So, keep these dangers in mind when starting out in real estate or upgrading to a more expensive property. If you opt for a longer payback period, start accelerating your payments as soon as you can. Retiring debt provides a risk-free after-tax return approaching 10 per cent, one of the best you can get in today's volatile markets.

http://www.thestar.com/article/412683

Understanding Tax Deductible Mortgage

2008-04-06T18:19:00.000-07:00

A HELOC is a Line of Credit secured by real property. It is a Line of Credit (LOC) is an amount of credit made available to a Borrower but not advanced on closing. For example, if a Borrower had a $200,000 LOC he or she would be able to use this funds whenever he or she wished. However, payments are only made on the outstanding balance of the LOC. A typical HELOC has monthly payments of interest only based on a variable rate. The Borrower can make payments as small as the interest only or as large as he or she wishes.

What is Tax Deductible Mortgage? Basically it's the Smith Maneuver, where you use a HELOC (Home Equity LOC, 75% of equity needed usually) every time you pay down your principal your HELOC increase and you setup an automatic withdraw from the secured LOC to invest in usually high paying dividend stocks, large cap mutual fund, or index funds.

For more information about Tax Deductible Mortgage http://www.thetaxdeductiblemortgage.com

Buyers turning to more affordable condo market

2008-04-02T19:00:00.000-07:00

Buyers have shifted to more affordable condominiums in Toronto. Last year set a record for condo sales in the Toronto are with more than 22,654 sold making the city the top site in North America for high-rise building.

According to the CMHC, the rate of housing starts was up by 24.8% at 47,800 last month, compared to January. Today’s lofty prices can mean saving tens of thousands of dollars more for a down payment than in the past. But, it’s still a dream of many young adults to buy a first home. It is important that homebuyers properly evaluate their current financial situation and seek proper guidance about what they can truly afford.

Mortgage broker will help you evaluate your Gross Debt Service (GDS) ratio or front ratio. The front ratio is the percentage of your monthly gross income (before taxes) that is used to pay your housing costs, including principal, interest, taxes, insurance, mortgage insurance (when applicable) and homeowners association fees (when applicable).

Another financial measure for home affordability is the Total Dept Service (TDS) ratio or the back ratio. The back ratio is the same thing, only it also includes your monthly consumer debt. Consumer debt can be car payments, credit card debt, installment loans, and similar related expenses. Auto or life insurance is not considered a debt.

Announcing Our $100,000 Winner for 2007

2008-03-29T17:50:00.000-07:00

And the Winner of the 2007 Mortgage Alliance Minimize Your Mortgage Sweepstakes is…..

Vasanthakumari Ratneswaran from Markham, Ontario

On February 28th the draw was conducted with a representative from the accounting firm of McGovern, Hurley, Cunningham, LLP facilitating the actual selection of potential “winning” names.

We then performed due diligence on the file of the potential winner and confirmed all information was correct prior to contacting them.

On March 10 th we attempted our first contact with the potential 2007 Grand Prize Winner – who are new Canadians from – and speak Tamil.

Communicating the good news was to say the least, a challenge – in fact they hung up on us twice as we attempted to communicate them!

We were then able to finally speak to another member of the household two days later and they finally understood why we were calling.

We then delivered (by special courier) the required documentation which they had (legally) 14 days to fill out accurately (including a skill testing question) and return back to us.

This past Tuesday we received their completed declaration form which was correctly answered.

And now FINALLY we are able to share the exciting news with all of you!

Benefits of Reverse Mortgage for Seniors

2008-03-26T07:00:00.000-07:00

A Reverse Mortgage is a type of mortgage that is typically provided to seniors. This provides homeowner who are 60 years of age or older to release some of the equity of the home. Some mortgage lenders allow you to borrow up to 40% of the property value in a lump sum of cash, less any current debt secured by the property.

There are no repayment until you sell your home, move or pass away. The amount accumulates interest until the death of the last surviving spouse or until the property is sold, at which time the mortgage is due and payable.

According to the Canada Home Income Plan (CHIP), this is tax free type mortgage. This mortgage is suitable for seniors looking to enhance their lifestyles, travel, or renovate their house to increase the property value .

For more details go to http://www.chip.ca/

Importance of Your Credit Rating

2008-03-22T07:00:00.000-07:00

In Canada, the two main credit reporting agencies are Equifax and Trans Union. Both of these credit reporting agencies allow consumers to get their own report.

Credit report is a detailed collection of your entire history of borrowing habits. This report is being used by more and more institutions all the time to check your payment history, your previous loans, any liens against your property, where you've lived and work, whether you have been sued, and whether you have declared bankruptcy in the last seven years.

Check your credit report at least once every two years to make sure that everything on it is accurate. Many people do not know is that you have legal right to be able to gain access to this information. Not just to see where you stand, but also to correct any erroneous reporting that may have occurred. By law, people have a right to see what is in their file.

http://www.equifax.ca

Big Rate Cut Expected

2008-03-19T16:36:00.000-07:00

The U.S Federal Reserve Board reduced the federal funds rate down to 2.25% on Tuesday March 18. The 75 basis points reduction in the funds rate was designed to lower borrowing costs and boost spending by consumers and businesses and thus increase economic activity. The U.S economic growth slowed to a near standstill in the past three months due to credit crunch, a prolonged housing slump, rising unemployment and surging energy prices.

Bank of Canada may need to cut rates more aggressively in the weeks ahead, even ahead of its next scheduled meeting on April 22. "Canada's economy is much sounder and financial markets are in stronger shape than the U.S, so Bank of Canada don't have the same urgency to cut rates because of the strong Canadian dollar," said BMO deputy chief economist Douglas Porter.

Mortgage trends: If you are planning to buy in the next two years, a variable-rate mortgage would offer greater savings compared to closed mortgage. Studies have shown that variable open mortgage offers the potential for homeowners to save thousands of dollars in interest costs over the life of the mortgage.

http://www.thestar.com/article/347272

Become an Educated Consumer

2008-03-16T16:02:00.000-07:00

Becoming an educated home buyer is one of the best things you can do to avoid making costly mistakes. It is important to shop wisely to get the best deal possible before you decide to take on a mortgage. There are many mortgage lenders that offer a similar array of mortgage options. Compare the mortgage terms and interest rates offered by various mortgage lenders.

The best place to start is by getting a pre-approval, so you know the exact amount of loan you are qualified before you start house hunting. Most home buyers purchase houses that cost between 1.5 and 2.5 times their annual income. For example, a home buyer earning $40,000 per year would buy houses costing between $60,000 and $100,000. Your monthly mortgage payment cannot exceed approximately 28%-29% of your gross monthly income. Your total debt payments (car payments, credit card payments, etc. plus the monthly mortgage amount) cannot exceed approximately 36%-40% of your gross monthly income. These ratios will depend on the type of mortgage for which you are applying.

It is also a good idea to get a professional home inspection before you sign the contract. Home inspection can cost between $200 to $500, this could be the best money you ever spend on your house. Home inspection can reveal many hidden flaws and problems that could cost you thousands of dollars in repairs. Not only does the home inspection seek out any defects (and gives you some peace of mind), the home inspector will often give you tips on maintaining and repairing your house.

Tips on How to Choose a Reliable Builder

2008-03-12T06:40:00.000-07:00

Buying a house is a lifetime investment for most of us. So choose a builder who is reliable and can deliver the goods he promises on time.

Check the credential and reputation of the builder. Visit the projects that have been completed and talk to owners. Try to get as much information as you possibly can regarding prices, terms of agreement, delivery schedules, quality of construction, etc.

Examine the prices carefully. In some cases, their advertised building price actually excludes the cost of upgrades. Ask exactly what is and isn't included in a quoted building rate. See whether there are any discrepancies between the quoted price in the brochure and the actual price. Get everything in writing. The building contract should specify all work to be done, construction start and end dates, and a fixed price.

Stay involved during construction. Visit the site regularly and make sure the home is inspected properly at each stage of construction. Address problems as they occur.

The building contract should give you at least 60 days to notify the builder of any problems or defects you did not notice during construction.

Real Estate Flipping

2008-03-09T04:36:00.000-07:00

Buying, renovating and selling a house for profit is known as real estate flipping. Flipping a house is high-reward field in real estate investing. Do your research first before you begin so that you know what you are getting into.

Property Location - When searching for real estate to flip, think location. Look where housing demands are high and houses do not stay on the market long so you will be able to sell the property once you’ve renovated it. It is also helpful to look for property that has rental potential in the event a resale takes more time than planned.

Flipping Costs - You must have a very good idea of how much you are going to have to spend on your flip before you purchase the house. Estimate all the costs in your budget. There are purchase costs such as upfront mortgage fees, attorneys fees, regular closings fees, and title. Carrying costs include the cost for repairs and other costs such as monthly payments, property taxes, insurance, and utilities. Selling costs includes, closing costs and possibly real estate commissions to consider.

Home Inspection - Have a full home inspection. It may cost you a few hundred dollars, but will catch things that maybe you didn’t know to look for.

Reliable Contractor - The easiest way to find a good contractor is through referrals. You cannot be at the job site all the time. This is where the contractor comes in handy. He/She can keep a close watch on your time line and also the part of the budget that is his/her responsibility. He/She can keep track of problems and readily find solutions.

Quick Fix - Look for property that requires minimal expense to ready it for resale. Don't over-repair or over-fix up. The less money you spend readying the property for sale, the higher your profit on resale. Spruce up the kitchens and the bathrooms. They will noticeably increase the price of a house. But be sure that fixtures and appliances match the target price range. If the kitchen and bathrooms look clean, sleek and updated, the house will sell faster and for a higher profit.

Progress Report - Keep track of your progress. After making a detailed list of renovations to be done, come up with a timeline. A timeline is an important way to let contractors know when the next group of workers needs to be in a specific part of the house. Throughout the entire house flipping process, you have to constantly monitor your progress. That way, you will know at any given time where you stand on the project. One rule of thumb is to work the big work projects first. This will help keep you focused by keeping the bottom line in front of you all the time.

Insurance & Permits - It takes time to obtain permits so you need to apply for them before work begins. Contracts and receipts are doubly important. Be sure to keep them. You also need to obtain insurance coverage not only on the property but the workers as well.

Banks Cut Prime to 5.25% Effective March 4

2008-03-05T16:35:00.001-08:00

Canada's major banks waited several hours before adjusting their prime rates reducing variable mortgage and other products by 50 basis points to 5.25%. After a rate cut by the BOC, Canada's big banks have cut their prime lending rates to 5.25% from 5.75% effective March 4, 2008.

If you're shopping for a mortgage, don't be afraid to ask for a lower rate than is quoted. Remember that the posted loan rates are only guidelines. To find the best rate is to shop online. If you're not happy with the rate your financial institution quoted, check around to see what other lenders are offering. Your alternatives include banks, trust companies, credit unions, mortgage loan companies and government lending institutions

http://www.thestar.com/Business/article/309400

Real Estate Investment Meetup

2008-03-02T04:37:00.000-08:00

My husband and I are looking into investing in real estate. This would be a long term investment. There are many different ways to get information about investing in real properties from online, books or attending real estate seminars.

Recently we attended a meetup group called the Condo Investor Meetup that were organized by real estate sales agent. There are many other similar meetups available organized by other real estate brokers. The Condo Investor Meetup is a monthly meetings held at Second Cup. I found that these meetup are informal, very casual and more relaxed atmosphere.

These information sessions are free to attend and is a great opportunity for the real estate agents to build a close relationship with their clients. There are many benefits of joining a real estate investment group. They can be as fundamental as getting the opportunity to meet like minded investors.

It's free to join

You learn from other real estate investor

Listen to different real estate investment strategies and opportunities

Opportunities to network with broker, sales agents, and independent contractor

Get instant feed back from experts

The meetup is about 1-2 hours, the organizer do not to waste other people's time so you're free to leave at any time

Bank of Canada Cutting Rates Announcement

2008-02-27T07:00:00.000-08:00

The Bank of Canada's next scheduled date for announcing the overnight rate cut is on 4 March 2008 .

The U.S slowdown turns out to be more significant threats to the Canadian economy than the bank had projected. The Bank of Canada has to weigh strong domestic demand against the spillover effects of the slowing U.S. economy when deciding how much to cut interest rates next month.

Governor Mark Carney suggested he could potentially reduce the bank's overnight rate by 50 basis points from 4% to 3.5%, as most market players expect. In addition, the strong Canadian dollar has pressured some retail prices lower but there is a risk that the downward pressure on inflation could be greater and more prolonged than the bank had assumed, he said.

http://www.financialpost.com/creditcrunch/story.html?id=317329

How Accurate Are the Appraisals of Your Home?

2008-02-24T05:24:00.000-08:00

Knowing the value of real estate is critical today. Banks, Loan and Mortgage Brokers need real estate appraisers to evaluate the loan risk when lending money in both credit and security. Lenders will hire an independent appraisal company to provide appraisal reports describing the property an analysis for new homes, re-sale, mortgage renewals, increases, power of sale or foreclosure.

There are many situations in which it is vital to know the value of a property:

To obtain financing for your property
To estimate value for insurance claims or coverage
To estimate current equity, or market value for purchase or sale
To confirm government values in tax and capital gains assessments
To serve as a basis for equitable settlements of estates and property in litigation

For more information, visit the Appraisal Institue of Canada website http://www.aicanada.ca/e/findappraiser_find.cfm

10 Reasons You Should Own

2008-02-20T16:22:00.000-08:00

Renting vs. Buying a Home: Here are 10 reasons you should own a home.

Housing prices have combined with low mortgage rates to make the rent from a house fairly similar to the mortgage cost.

With the tax savings of homeownership, the homeowner's payment is less than the rental payment after 3 years.

Not dependent on landlord to maintain property.

Property builds equity. When you sell your home, you don't have to pay any income tax on the gain.

Sense of community, stability, and security.

Free to remodel, redecorate and change the landscaping of your home to match your needs and desires.

Over time, the mortgage balance decreases and equity builds, even if the value of the home does not increase

Mortgage payment stays the same over 30 years. If you were a renter, your rent would definitely go up.

The traditional down payment for a house is 20%, and many mortgage types allowed you to get away with less than 20% down payment to help accommodate the homebuyer who did not have sufficient savings.

Pride and comfort in owning your own home.

Mortgage Default Insurance

2008-02-17T13:56:00.000-08:00

Many buyers in recent years have stretched the limits of affordability, and have bypassed the traditional 20% down model. If you put less than 20 percent down on a home mortgage, lenders often require you to have mortgage default insurance. The insurance protects the lender if you default on the loan. The insurance premium can range between 0.65% and 2.75% depending upon how much of the purchase price or home value is financed with a mortgage loan.

If you have a predictable monthly income and feel reasonably certain that your job is secure, you may want to consider putting down as much as 20%. It will certainly bring you smaller monthly payments, instant equity, an investment in that neighborhood’s growth, and you’ll avoid paying mortgage loan insurance.

If you are buying a home, know the home’s price and how much you plan on putting down. Most mortgage lenders require at least 10% for people with poor credit, but 20% down will help you avoid private mortgage insurance, saving you hundreds a year.

For more information go to Canadian Mortgage and Housing Corporation
http://www.cmhc-schl.gc.ca

Why Use a Mortgage Broker?

2008-02-13T13:52:00.000-08:00

Mortgage brokers are certified professionals who seek the best mortgage terms and most competitive interest rate for homebuyers by accessing a network of lenders that include major banks, trust companies, credit unions, and finance companies. One in five Canadian mortgages are now handled by mortgage brokers.

More and more homebuyers are working with mortgage brokers to help them search for the right mortgage, thereby saving time, money and stress. This service does not cost the homebuyer a cent, brokers are paid by lenders not by the buyer.

According to the Mortgage Consumer Survey by CMHC, 92% of first time purchaser who use a Mortgage Broker were either rather or tolly satisfied; 87% of repeat purchasers who used a Mortgage Broker were either rather or totolly satisfied; 87% of refinancers who use a Mortgage Broker were either rather or totally satisfied; and 80% of renewers who used a Mortgage Brokers were either rather or totally satisified.

Apply Feng Shui to Attract Buyer

2008-02-10T13:48:00.000-08:00

Feng Shui is an ancient Chinese practice of placement and arrangement of space to achieve harmony with the environment to enhance your health, wealth and personal relationships. Feng shui literally translates as "wind-water." Successful business people like Donald Trump and Oprah Winfrey are using Feng Shui.

Start by clearing out your clutter is one of the most powerful ways to shift the energy of your home. Feng shui should be easy, graceful, and fun. If you love something, it has good chi for you. Apply feng shui to attract buyers or improve the Chi in your home. Chi is an energy that should flow freely throughout your home.

ENTRYWAY: The front entrance is where Chi enters your home. It should be well-defined, clear of clutter, bright and open. Remove mirrors opposite your entryway door. The mirror will reflect beneficial Chi and prosperity out of your home before it has a chance to enter.

LIVING ROOM: The living room should be clutter free and not over-furnished. Arrange furniture to create a leisurely meandering flow. The energy flow of this all-important room is essential for good Feng Shui. Soft, rounded sofas and chairs with high backs symbolize support in the lives of family members.

KITCHEN: Placing your stove next to or directly opposite your sink or refrigerator will cause a clash between the fire and water elements.

DINING ROOM: Place portraits of food or a large mirror in your dining area to promote abundance.

BATHROOM: Keep the toilet cover closed to prevent Chi being unnecessarily flushed away.

WINDOWS: Fix and repair windows. Replace broken glass panes and clean the windows. Chi flows through windows even when they’re closed.

PLANTS: Spiky leaves generate "poison arrows" are believed to give off bad energy. Choose round leafed varieties instead.

HALLWAY: If you have long corridors or cramped spaces in your home, paint them white and keep them well lit to ensure your Chi does not become stagnant.

BEDROOM: Place your bed diagonally opposite the door so you have a commanding view of the mouth of the Chi. Avoid putting the head of the bed under a window or exposed beam which gives off bad energy and can lead to unbalanced sleep.

Auspicious Moving Dates for 2008

2008-02-06T13:41:00.000-08:00

Happy Chinese New Year (Gong Xi Fa Chai)

Moving into a new house? Check the Chinese Astrological dates for 2008.

Choosing a good date to move into your new home is a traditional custom many Chinese follow. Chinese believe that when you move into your house on a good day, it is a good omen. It will help you have a positive new start in your new home. Things will go smoother and better.

January 1, 3, 6, 12, 15, 16, 24, 28

February 6, 10, 22

March 4, 6, 11, 12, 14, 18, 24, 26, 28, 30

April 6, 8, 12, 20, 22, 24, 30

May 2, 6, 7, 13, 15, 19, 24, 22, 27, 30, 31

June 6, 9, 12, 13, 23, 24, 25

July 1, 3, 6, 8, 13, 14, 16, 20, 28

August 3, 8, 10, 14, 20, 22, 26

September 1, 3, 7, 8, 13, 14, 20, 26, 30

October 2, 4, 9, 11, 15, 21, 27, 29

November 2, 4, 6, 9, 17, 20, 26, 27

December 3, 5, 9, 10, 16, 22, 28, 30

First Time Home Buyer

2008-02-03T13:27:00.000-08:00

The Canada Revenue Agency (CRA) has a program entitled the Home Buyer's Program (HBP) that allows a first time home buyer to use up to $20,000 of their RRSPs as a down payment without paying tax on the withdrawal. You can make more than one withdrawal, as long as the total of your withdrawals is not more than $20,000. If you buy the qualifying home with your spouse or common-law partner, or with other individuals, each of you can withdraw up to $20,000.

CRA defines a first time home buyer as an individual or the individual's spouse, or common-law partner who has not owned a home that they occupied as a principle place of residence during the period beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the withdrawal.You have to be a resident of Canada when you receive funds from your RRSPs under the HBP and up to the time a qualifying home is bought or built.

RRSP deduction may be affected by HBP participation, you may not be able to deduct all or part of the contributions made during this period for any year.

The amount removed must be repaid within 15 years. Over a period of no more than 15 years, you have to repay to your RRSPs the amounts you withdrew under the HBP. Generally, for each year of your repayment period, you have to repay 1/15 of the total amount you withdrew, until the full amount is repaid to your RRSPs. Your repayment period starts the second year following the year you made your withdrawals.

For more details go to

http://www.cra-arc.gc.ca/tax/individuals/topics/rrsp/withdrawals/taxfree-e.html

Banks Cut Prime to 5.75% Effective Feb 1

2008-01-30T13:19:00.000-08:00

After a rate cut by the Bank of Canada last Tuesday, Canada's big banks have plans to cut their prime lending rates as well. Royal Bank of Canada has announced that they will lower its prime rate to 5.75% from 6% effective February 1, 2008.

http://www.canada.com/ottawacitizen/news/business/story.html