Get your RRSP deduction & use it for down payment !! A legal loophole.

If you know you are buying your first home in the next 90 days, you can make a $25,000 RRSP contribution or $50,000 for two people. That means a big refund in April. You then withdraw the $25,000 or $50,000 to pay for that initial home’s down payment.

• Most people have the RRSP room to make a contribution. If you are buying a house by June and you have the down payment in cash, you can make the contribution to get the tax return.
• The “catch” is the contribution normally has to be in the plan for 90 days before you can take it out. Your possession date would have to be 91+ days after you make the RRSP contribution. If you would like more information on this call me at 403-836-1201 or visit my website .

New mortgage rule changs for 2011

Jim Flaherty , the finance minister, made 3 changes to the mortgage rules today.
1- mortgage amortizations were shortened from 35 years to 30 years
2- home refinancing was lowered from 90% to 85%
3- Home equity lines of credit()HELOCS) will not be insured by the government
How will this affect home owners and potential home owners? With 5 years shaved off their mortgages, monthly payments will rise. Consumers will get less house for their money as the monthly payments will put homes previously within their budget in the unaffordable category. How will this affect home owners and potential home owners? With 5 years shaved off their mortgages, monthly payments will rise. Consumers will get less house for their money as the monthly payments will put homes previously within their budget in the unaffordable category.
Of more importance is the 2nd rule change. If you want to refinance and take money out for your TFSA, RRSP, investments or for renos, you will be restricted to leaving 15% equity behind in your home. What most people will do is move to higher interest rate loans such as unsecured lines of credit, consumer loans and credit cards. I believe that this will encourage inflation and result in higher interest rates.
Finally, insuring HELOCS isn't an issue. Most HELOCS have 80% LTV limits so they were not insured anyways.
Today's new rules will be applied March 18th. If you are looking for a mortgage with a 35 year amortization to keep the payments down or if you want to refinance your home, you have until March 17th to take advantage of our present rules.
Call me at 403-836-1201 if you have any questions.

CMHC Changes starting April 9, 2010

Changes to the CMHC Self Employed Product will be effective April 9, 2010. For purchase and portability the maximum LTV will be 90%. For refinance the maximum LTV is 85%. Qualification rules have changed for this product. If a client has been self employed in the same business for more that 3 years, they are NOT eligible under the CMHC Self Employed Product without Traditional third party validation of income (qualified deal). CMHC will continue to require that the borrower have a minimum of 2 yeas experience in the same field. This can include time spent working as a non self employed worker in the same field. Lenders are expected to obtain a copy of the business or GST license or Articles of Incorporation. Therefore if a client is self employed over 3 years, then you cannot do a self employed product. It must be qualified. If a client is self employed up to 3 years, you can do a self employed product.

8) Commissioned income will no longer be eligible for the CMHC Self Employed Product without traditional third party validation of income.

I have been notified that GENWORTH will follow suit.

Bank of Canada holds steady

The Bank of Canada chose to hold steady and keep the bank overnight rate at .25% The bank pledges to try and keep this rate steady until the end of the second quarter of 2010 which means June

5 Steps to a Higher Credit Score

5 steps to a Higher Credit Score

Learn how to manage your credit score and improve your creditworthiness. Think of your credit score as a picture of your credit risk. This picture reflects your risk at a specific point in time. A picture does not change; however, when you take another one, you will probably look a little different. Similarly, when your credit information changes, your score will also change to reflect the updated information.

There are steps you can take to ensure that each time a new "credit picture" is taken, it shows your best side. By observing the following guidelines, you can influence your credit worthiness for the better:

1. Be punctual - Pay all your bills on time. Late payments, collections, and bankruptcies have the greatest negative effect on your credit score.
2. Check your credit profile regularly and take the necessary steps to remove inaccuracies - Don't let your credit health suffer due to inaccurate information. If you find an inaccuracy on your credit profile contact the creditor associated with the account or the credit reporting agencies to correct it immediately.
3. Watch your debt - Keep your account balances below 50% of your available credit. For instance, if you have a credit card with a $1,000 limit, you should try to keep the balance owed below $500.
4. Give yourself time - Time is one of the most significant factors that can improve your credit score. Establish a long history of paying your bills on time and using credit responsibly. You may also want to keep the oldest account on your credit profile open in order to lengthen your period of active credit use.
5. Avoid excessive inquiries - A large number of inquiries occurred over a short period of time may be interpreted as a sign that you are opening numerous credit accounts due to financial difficulties or overextending yourself by taking on more debt than you can easily repay.

Variable Vs. Fixed Rates

86% of Canadians are opting for fixed rate mortgages despite the fact that variable rate mortgages are at historic low rates (presently 2%) . Why is this? Are Canadians so risk adverse and conservative?
What do you think?
Here's an article on the subject. http://bit.ly/608nh4