When the housing market is softening, which way you are moving in the market will decide if you come ahead or go backwards.  A softening market has a greater affect on the higher priced homes.  Whereas a $400,000 house will drop to $380,000, an $800,000 house can go down well over $100,000.  So if your next move is to a higher priced home, now would be an excellent time to make that move.  You would a decent price for your average home, but would get a real bargain on your expensive purchase.

If you are staying in the same area, in the same price range, you should be okay.  If you are downsizing from an expensive home to a lesser one, you will have to take a much bigger hit than the house you are purchasing.

1. Buying more than they can afford!

I know that your mortgage broker figures you can afford that amount, but the payments on that amount, plus your property taxes, plus utilities, and if you bought a condo, your strata fees will probably put you into a position where you are scrambling every month to pay all the bills, especially vehicle costs.  At the very least, you will have to forget about an entertainment fund for the next few years.

(more…)

Below are some of the refunds, credits, incentives and rebates you can apply for, concerning energy savings:

1. CMHC Mortgage Loan Insurance Premium Refund

Provides homebuyers with CMHC morgage insurance, a 10% premium refund and possible extended amortization without surcharge when buyers purchase an energy efficient home or make energy savings renovations. (Go to www.cmhc.ca/en/co/moloin/moloin_008.cfm#reno.)

(more…)

Here are a few government rebates for buyers :

1. Home Buyers’ Plan

Qualifying homebuyers can withdraw up to $25,000 ($50,000 for couples) from their RRSPs for a down payment.  If you have repaid this RRSP, you may be eligible to use the program a second time. (Go to www.cra.gc.ca, enter “home Buyers’ Plan” in the search box.)

(more…)

The government of Canada has just recently increased the withdrawal from RRSPs for the first time buyer.  They can now withdraw $25,000 (up from $20,000) with 15 years to repay.

Your child is getting married and you want to help out financially.  What is the best way to do this? 

Here are a few options:

GIFT:  You could give your child an outright gift.  The advantage to them is that any gift given while you are living is tax free.  If given after your death, the gift is subject to probate.

If you do not care about protecting this money,  then an outright gift would be fine.  Should your child and spouse separate, the spouse would get half of your gift in settlement.

2nd MORTGAGE: By being on title, you protect this money from being lost in a separation.  One disadvantage is that any gains on your part are subject to capital gains tax.  Another disadvantage for the couple is that they would need your signature in order to sell that home. 

(more…)

The new Harmonized Sales Tax comes into effect on July 1, 2010.  There are some public misconceptions about this tax, so here is some information to help you sort through what you hear.

Fact:  The HST applies to NEW homes being sold for the first time and to homes that have been substantially renovated (90% or more).  The purchase agreement has to be signed after November 18, 2009, with possession dated on or after July 1, 2010.

(more…)