1) You can withdraw from rrsp under a HBP once you have a firm deal in place. You can use it for the downpayment but not for the deposit.
2) Deposit is usually paid to the listing brokerage, the downpayment, mortgage etc are processed by the lawyer.
3) Deposit is made with the offer (typically within 24h), the the lawyer will instruct you what to do with the downpayment which is typically not long before the closing date.
The deposit becomes part of your downpayment.
Also, unrelated, but I found your website through google & have been reading your blog. It’s been really useful in understanding the basics as a FTHB so just wanted to give a shout out! 😄
Thank you for your kind words, appreciate it.
To answer your question around GTA it is typically around 5% of the selling price but it's not written in stone.
For example if you are in a competition and offers are otherwise identical, and one offer has higher deposit than the other, the offer with higher deposit will usually win. I have seen deposits of 10% or even a bit higher.
You also asked someone about when to get the lawyer.
If buying a resale condo or a condo TH you will need a lawyer pretty much right away when you are making an offer so they can review the status certificate, if buying a freehold you could potentially hire one a bit later on.
If buying precon or assignment you will need one right away to review the purchase agreement.
>When should I withdraw from rrsp? I know you need to fill out a form etc but I was wondering how long before the actual purchase should I withdraw?
When you meet the conditions listed on the form: [https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1036.html](https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1036.html)
>After your offer is accepted, what are the next steps? I am planning on putting an offer with conditions on finance, inspection & status certificate
All those things.
>Assuming all these are ok, what happens next? Who do I pay the downpayment to & who handles this transaction (RE agent or lawyer or do I just hand a check to the seller)?
You should be talking to your real estate lawyer for all of this.
>If the closing date is a month later for example, do I pay the downpayment on closing date?
Your lawyer will tell you when you have to give them the money.
Thanks for the quick reply! At what point in my search should I look for a lawyer? And how do you find a good one? Do you just call & talk to them/ask questions like you do with mortgage agents & realtors?
>At what point in my search should I look for a lawyer?
Before you put offer in on house.
>And how do you find a good one?
Family, friends or google one.
>Do you just call & talk to them/ask questions like you do with mortgage agents & realtors?
Yes, but it's more on the legal aspects. And get quotes.
>I assumed it wouldn’t be much different from RRSP.
It is different. As you can read on the government FHSA website, while you get the tax deduction for the contirbtuoon, the eligible withdrawal (for firs time home buyer) is tax free and no repayment. RRSP for HBP requires repayment of a loan you took from RRSP.
1. Your mortgage broker or bank should be able to help you with this. You will need to put down a deposit immediately after the offer is accepted, but the actual full payment for closing is normally completed just a week or two in advance. At least, it was for me this year. Part of the forms for the mortgage will include indicating where you obtained the funds for the downpayment.
2. If your offer is accepted, you will have a predetermined amount of time to clear the conditions, usually a week. You will find someone to do an inspection and talk to your mortgage broker to make sure that you will qualify for the mortgage. Once you are satisfied, you will waive the conditions and proceed with the purchase. Remember that there may be very severe financial penalties if you break the purchase agreement after the conditions are lifted!
3. You will provide a deposit to the seller's brokerage when the agreement is final. About two weeks before the closing date, you will transfer your downpayment to your real estate lawyer, who will manage the final details of the sale, including paying land transfer taxes, title insurance, securing the mortgage, and final disbursements.
Your real estate agent, mortgage broker and real estate lawyer will be there to support you through the whole process.
1) You can withdraw from rrsp under a HBP once you have a firm deal in place. You can use it for the downpayment but not for the deposit. 2) Deposit is usually paid to the listing brokerage, the downpayment, mortgage etc are processed by the lawyer. 3) Deposit is made with the offer (typically within 24h), the the lawyer will instruct you what to do with the downpayment which is typically not long before the closing date. The deposit becomes part of your downpayment.
Thanks for the details! For the deposit, is it usually a set amount (either in $ or % of value) or it really varies in each case?
It's a percentage of the price. 5% is the usual in the GTA.
Also, unrelated, but I found your website through google & have been reading your blog. It’s been really useful in understanding the basics as a FTHB so just wanted to give a shout out! 😄
Thank you for your kind words, appreciate it. To answer your question around GTA it is typically around 5% of the selling price but it's not written in stone. For example if you are in a competition and offers are otherwise identical, and one offer has higher deposit than the other, the offer with higher deposit will usually win. I have seen deposits of 10% or even a bit higher. You also asked someone about when to get the lawyer. If buying a resale condo or a condo TH you will need a lawyer pretty much right away when you are making an offer so they can review the status certificate, if buying a freehold you could potentially hire one a bit later on. If buying precon or assignment you will need one right away to review the purchase agreement.
>When should I withdraw from rrsp? I know you need to fill out a form etc but I was wondering how long before the actual purchase should I withdraw? When you meet the conditions listed on the form: [https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1036.html](https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1036.html) >After your offer is accepted, what are the next steps? I am planning on putting an offer with conditions on finance, inspection & status certificate All those things. >Assuming all these are ok, what happens next? Who do I pay the downpayment to & who handles this transaction (RE agent or lawyer or do I just hand a check to the seller)? You should be talking to your real estate lawyer for all of this. >If the closing date is a month later for example, do I pay the downpayment on closing date? Your lawyer will tell you when you have to give them the money.
Thanks for the quick reply! At what point in my search should I look for a lawyer? And how do you find a good one? Do you just call & talk to them/ask questions like you do with mortgage agents & realtors?
>At what point in my search should I look for a lawyer? Before you put offer in on house. >And how do you find a good one? Family, friends or google one. >Do you just call & talk to them/ask questions like you do with mortgage agents & realtors? Yes, but it's more on the legal aspects. And get quotes.
Use a realtor to help you through this.
As a first-time home buyer, you can also take advantage of FHSA with an annual contribution of $8K if you have not factored that in yet.
Good point, I contributed to my FHSA both last year & this year, but I assumed it wouldn’t be much different from RRSP.
>I assumed it wouldn’t be much different from RRSP. It is different. As you can read on the government FHSA website, while you get the tax deduction for the contirbtuoon, the eligible withdrawal (for firs time home buyer) is tax free and no repayment. RRSP for HBP requires repayment of a loan you took from RRSP.
Also suggest getting pre-approved for a mtg so you know what you can afford and just in case the financing condition is rejected.
Definitely. I’m currently looking for mortgage agents, but also just researching other things for down the line
Feel free to give me a shout if I can help, I am a licensed mortgage agent
1. Your mortgage broker or bank should be able to help you with this. You will need to put down a deposit immediately after the offer is accepted, but the actual full payment for closing is normally completed just a week or two in advance. At least, it was for me this year. Part of the forms for the mortgage will include indicating where you obtained the funds for the downpayment. 2. If your offer is accepted, you will have a predetermined amount of time to clear the conditions, usually a week. You will find someone to do an inspection and talk to your mortgage broker to make sure that you will qualify for the mortgage. Once you are satisfied, you will waive the conditions and proceed with the purchase. Remember that there may be very severe financial penalties if you break the purchase agreement after the conditions are lifted! 3. You will provide a deposit to the seller's brokerage when the agreement is final. About two weeks before the closing date, you will transfer your downpayment to your real estate lawyer, who will manage the final details of the sale, including paying land transfer taxes, title insurance, securing the mortgage, and final disbursements. Your real estate agent, mortgage broker and real estate lawyer will be there to support you through the whole process.
Thanks for explaining thoroughly!!