17 Nov 2015
Home Buyer’s Plan: Understand Your Investment
Brad and Brenda have been putting some money in their RRSPs investments for the last four years. Their last statement shows that they have $12,500 in their RRSP’s savings, and they also have $5,000 in the bank in their savings account.
They decided to buy a starter home in Winnipeg, MB for the price of $250,000. According to their investments statement, they had enough money in their bank and RRSP account to put 5% down ($12,500) PLUS closing costs of 1.5% ($3750) of $250,000. If we add down payment and closing costs together, it comes to $16,250 – this is the amount they needed to buy this starter home.
They deposited $5,000 with an offer; their offer got accepted since their RRSPs investment statement shows another $12,500. They filled out the forms to withdraw all the investment money for the down payment. Once the money from their RRSP investment was transferred into their bank account, it had a $2,100 shortfall. Now Brad and Brenda has $14,150, but they need $16,250 to buy this home. Some funds do better than other funds – it totally depends on an individual portfolio.
Brad and Brenda must have knowledge of the actual amount in their RRSP investments instead of depending on investment statements.
Their meeting with a mortgage professional from Dominion Lending Centres could steer them in the right direction.