New information about CMHC's program to help First Time Home Buyers

A little bit of new news from Canada Mortgage and Housing Corporation regarding the Federal Government program to help First Time Home Buyers with a downpayment on their first purchase. The program allows for the government to provide 5% of the purchase price on existing homes and up to 10% of the purchase price on new homes. When you sell the home, this money has to be paid back. Let's say that the home goes up in value by 10% when you sell and they gave you 5% of the purchase price. The government will want the 5% back (of course) and they want you to also pay them back the percentage increase that their 5% earned. So, if you bought a home for $100,000 that went up 10% in value and they gave you $5,000 or 5% of the purchase as part of the program, you pay back $5,000 plus $500. This is the Federal Governments equity in your home. Don't worry, if home prices go the other way, and when you sell the home has gone down in value, you only have to pay back the net amount of the $5,000 after the percentage decrease in value. The program is not set to launch until September so trust that more details will follow as we pass through the summer.

How much can I take out of my RRSP for a Downpayment?

We were recently approached by a First Time Home Buyer who was told by his realtor that he could only take $20,000 our of his RRSP to use towards his downpayment and he wanted to know if this was correct. Well, at one time the information was correct but not today. The March 2019 Federal Budget increased the limit on RRSP withdrawls to $35,000 per applicant. You still have 15 years to pay the money back into your RRSP and you can pay it all back earlier if you wish. Some additional details that a lot of people don't know about is that not all the withdrawl has to go towards your downpayment, you could use the money to pay off debts, cover closing costs such as legal and tax adjustment, use the funds for renovations and technically, as long as you buy a home at the time of the withdrawl, you could use the money for a vacation to recover from the stress of buying a home.

What happens when you die without a will?

I recently had the opportunity to speak with Daniel Boisvert, President of the BC Association of Notaries and I asked him what happens when someone dies without a will. We had a good conversation including a discussion about whether or not it is safe to use a store bought will kit.