Using your RRSPs for a down payment 

Tip: you can use your Registered Retirement Savings Plan (RRSP) to help make your first home a reality. The Home Buyers' Plan is your golden ticket, allowing you to withdraw up to $35,000 from your RRSP entirely tax-free.

Here's how it works: You and your spouse can each withdraw up to $35,000, totaling $70,000 for a down payment on your first home. It's a brilliant way to leverage your retirement savings without the usual tax implications. Plus, you have a  15-year window to repay the funds back into your RRSP, ensuring your retirement savings remain intact. This repayment obligation starts two years after your withdrawal so it leaves a nice buffer for you to settle in. This savvy financial strategy can make that dream home closer than you think.

Double your down payment by combining the HBP & the FHSA

(Home Buyer Plan and First Home Savings Account)

Don't ignore these two powerhouse accounts! The FHSA which was just introduced in 2023, lets you save up to $40,000 for the purchase of a first home. Combined with the allowable $35,000 withdrawal from an RRSP, that is $75,000 for a possible down payment. If there are two first time home buyers on the mortgage and you both have these funds saved, then that is a total of $150,000 you can withdraw for your down payment. The biggest difference between these accounts is that your RRSP will be repayable within 15 years, starting two years after your withdrawal. However, the FHSA does not need to be repaid. And they both give you tax savings on your tax return!

Consider a co-signer to boost your qualifying amount

Having a co-signer on a mortgage can provide several advantages. It primarily helps individuals with limited credit history, income or lower credit scores qualify for a mortgage. With a co-signer, you might be able to secure a larger loan amount, allowing the purchase of a more desirable property.

However, it's important to recognize the shared responsibility and potential credit implications for both parties. Timely payments can boost the credit profiles of the primary borrower and co-signer, but missed payments or defaults can harm both credit histories. Therefore, clear communication and trust are vital in co-signing agreements. The ideal co-signer would be a family member like a parent or a sibling and they would have low debts, some income and a good credit score. In a few years, if you qualify for the mortgage on your own, the co-signer comes off title for a small legal fee.  

Are you Business for Self and write your income down for tax purposes?

There's a mortgage for that! This is sometimes referred to as the Stated Income or Business Bank Statement product. This product is perfect for borrowers who have a difficult time qualifying the traditional ways ie. with a paystub or a T4. Instead of using those documents to qualify, we go through 12 months of your business bank statements and add up your income/deposits. We then subtract your big recurring withdrawals and end up with a number we can use for your income. This allows you to keep your personal taxes low while not compromising on your price range. There is a lender fee associated with this but it’s nominal compared to the taxes saved for even just one year of personal taxes. Your bank might just tell you that you don't qualify or you have to claim more income but this simply isn't the case.

Real Estate Investing: Need a down payment?

For many real estate investors in Ontario, leveraging equity in your current property is a strategic move. This means tapping into the built-up value of your existing properties to finance your next investment. It's a clever way to grow your property portfolio without dipping too deep into your savings or taking out a personal loan.

Here's how it works: as your property appreciates in value or as you pay down your mortgage, you build up equity. By refinancing or taking out a home equity line of credit (HELOC), you can access this equity and use it as a down payment for your next investment property. This approach allows you to make your money work for you, potentially increasing your returns while minimizing the need for a hefty initial investment. Just be sure to consult a financial advisor or mortgage professional to ensure it's the right move for your unique situation.

Spousal Separation: Did you know?

On the breakdown of a marriage and subsequent separation, you are considered a first time home buyer again in one key area -- withdrawing from your RRSPs! If you need help for a down payment boost, you can withdraw up to $35,000 from your RRSPs provided that any withdrawal you have already made has been paid back. Same rules apply for paying it back, you have 15 years to do so starting two years after the withdrawal.

Refinancing after a separation: Did you know?

On a typical refinance, you can only go up to 80% of the home's value. However, when a spousal separation is involved you are permitted to go up to 95%! You will pay an insurer premium (included into the mortgages not upfront) but you can pay out your ex-spouse and stay in the home. If you have kids and are trying to avoid the upheaval while still giving your spouse what is due, this is a great option.

Renewing your mortgage in Ontario:

When it's time to renew your mortgage, it's a good idea to shop around. Using a mortgage broker might be your best option, even if you have banked with the same bank for years.

Here's why:

• Brokers have a bunch of lender connections, which means you get more choices and possibly better rates.
• They know the mortgage landscape inside and out and know exactly what products would be the best fit.
• Plus, they're all about you, not just one bank. They'll save you time by doing the heavy lifting and know what different lenders are looking for.

So, even though banks are an option, mortgage brokers can often score you better terms and more flexibility, making the whole mortgage renewal process easier and less costly. Plus, their services are FREE.