Minimum down payment expected to increase

While there has been a lot of speculation that the Department of Finance would implement legislation to increase the minimum down payment from five to ten percent of a home’s value, it did not happen. Instead, they announced on Tuesday, the following changes that will be implemented on April 19, 2010:

1. All borrowers must be able to qualify for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term.

2. The maximum amount that a homeowner can withdraw when refinancing their mortgage has been reduced from 95 percent to 90 percent.

3. Anyone purchasing a home as an investment (non-owner-occupied properties) is required to pay a minimum down payment of 20 percent.

Knowing the total floor area of home makes it easer to establish true market value

It is important for sellers to know the total floor area of their home before putting it up for sale. Not having the proper measurements makes it difficult for potential home buyers to establish the true market value of the seller’s home. In addition, appraisers are unable to make the correct adjustments to comparable sales, and lenders have less accurate estimates of market value on which to base their loans.

The Importance of marketing your home

Marketing a home in Brampton is different than marketing any other product or service. That’s because every home is different and therefore requires a marketing program that is specific to your home. It is important to compare similar properties and to examine your home’s features before making any marketing decisions. Any improvements that might improve the appearance of the property should also be addressed. Remember, homes that look great usually sell faster and for a higher price.

How do I apply for the Land Transfer Tax Rebate?

If you are purchasing a home in Brampton or anywhere in the GTA area, your lawyer will probably complete the appropriate tax statements in the electronic land registration system, and the refund will be deducted automatically from the land transfer tax that would otherwise be payable. If this did not occur, after registration you can apply for the refund by submitting an application to the ministry consisting of the following documentation:

1. Completed Land Transfer Tax Refund Affidavit for first-time homebuyers
2. Copy of the registered conveyance
3. Evidence of the amount of tax paid on registration
4. Copy of the Agreement of Purchase and Sale (including all schedules and amendments)
5. Copy of the Statement of Adjustments
6. Copy of the Tarion new home warranty certificate (if applicable)

Take advantage of the Home Buyers’ Plan

Use the money in your RRSP's to take advantage of the Canada Customs and Revenue Agency Home Buyers' Plan. First-time homebuyers purchasing a home in Brampton may withdraw up to $25,000 (tax-free) from their RRSP, and use it as a down payment or to cover other purchase-related costs. Spouses or partners can do the same, for a combined total of $50,000.

Rebuilding your credit after bankruptcy

There is no don’t need to hire a professional to help repair your credit. You can do it on your own by simply following these tips.

1. Apply for a bankruptcy discharge. If you have never been previously bankrupt, you may qualify for an automatic discharge from bankruptcy in nine months.

2. Obtain a copy of your credit report. Check if they are any errors and correct if necessary by notifying the credit bureau right away.

3. Get a secure credit card. Use your savings to place a deposit with the credit card company. You will be given a credit card with a similar credit limit. The credit report will not be able differentiate between a secure credit card and a normal credit card.

4. Open a savings account. It is a well known fact that banks lend money to individuals who have it and not to those who desperately need it. To be able to borrow again, you will need to prove to the banks that you know how to handle money. Having savings is the best way to do this.

5. Get a RRSP. Use your savings to purchase RRSP’s. If you invest $1,000 in an RRSP, the bank will probably be willing to lend you another $1,000 to contribute to your RRSP. That $2,000 you contribute will generate a refund at tax time that will be almost enough to pay off your loan. Your credit report now shows a paid off loan, which looks great on your credit report, and you have $2,000 invested in an RRSP.

6. Pay bills on time. Make timely payments on all of your current accounts. Get current on accounts that are past due.

7. Reduce maxed out account. Having maxed out credit cards costs credit score points. Bring maxed out credit cards below the credit limit, then continue working to pay the balances off completely.