Jun 02

Mortgage Q & A’s for 2009

larry-200x285How Much do I have to put down on my house purchase?
While there are still a few programs available to purchase a home with little or no down payment, you should expect to provide a down payment of at least 5% of the purchase price of the home. Most lenders today also expect you to have 1.5% of the purchase price available for closing costs (legal fees, appraisals, taxes, etc). There are exceptions to these guidelines, so check with a mortgage professional.

Over how long a period can I amortize my new mortgage?
Formerly a mortgage borrower was able to obtain mortgage financing and amortize the mortgage for up to 40 years. Recent rule changes have by and large eliminated the 40 year pay off period and the maximum is now 35 years.

How can I use the Home Buyers Plan (RRSP Withdrawal) to assist with my home purchase?
The Home Buyers Plan is available to any qualifying first time home buyer. You are not considered a
first-time home buyer if you or your spouse owned a home that you occupied as your principal place of residence in the past 5 years. The recent Federal Budget increased the amount that you can “borrow” from your RRSP to $25,000 per person. There are a number of qualifying criteria which can be viewed on the Canadian Government website: http://www.cra-arc.gc.ca. Search for “Home Buyers Plan”.
First-Time Home Buyers’ (FTHB) Tax Credit

Home Buyer’s Tax Credit
For 2009 and subsequent years, the recent Federal budget introduced a new non-refundable tax credit, based on an amount of $5,000, for certain home buyers that acquire a qualifying home after January 27. The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, the credit will be $750.The tax credit, whether claimed by a single or a couple cannot exceed $750.00. Again details of this program are available at http://www.cra-arc.gc.ca. Search for “HBTC”