Are you a First time Homebuyer looking to buy this spring/summer?
First Time Homebuyers can use up to $25,000 of their RRSPs without facing any holding tax and you have up to 15 years to recontribute those withdrawn RRSPs. This is the time to maximize your RRSP contributions to build your downpayment.
First Time homebuyers who are looking to buy their first home in the $300,000 price range, will require a minimum 5% downpayment of $15,000 plus additional $3000 for closing costs (home inspections, legal fees, etc).
If you are a First Time homebuyer and are a few thousand dollars short on a downpayment, using an RRSP contribution could help you achieve the required funds needed to purchase in the next 90 days.
The deadline for RRSP contributions for the 2015 tax year is February 29, 2016.
Sit down with an accountant or use an online software to determine what amount of RRSP contribution will maximize your income tax refund.
This income tax refund can be used as a downpayment along with the RRSPs.
Here are 2 things that you can do to maximize your tax refund by topping up your 2015 RRSP contributions:
1. Extra money in a TFSA or savings account – roll those funds into an RRSP and use that RRSP contribution on your taxes.
2. Get an RRSP loan – it may be beneficial to get an RRSP loan to maximize your contributions. Any contributions into an RRSP must be held in an RRSP account for 90 days before it can be withdrawn. If you plan to use these RRSPs for a downpayment, have your bank put these in a RRSP cash holding account and not in a locked product.
If you are a First Time homebuyer and wondering how best to maximize your RRSPs to use as a downpayment, contact Jacqueline Jeffries with River City Financial,
Your Mortgage Broker, Jacqueline Jeffries is ready to help you. Call her at 780.220.5968 or email email@example.com and I will help you explore those options to get you into your first home!