# Downpayment



## swanhills_ca (Feb 2, 2010)

We are looking at moving to a different town after school is done in June. We are putting our house up for sale in April but we have found a house of interest already. We have good credit and not much for debt. We can afford both places until the house sells. All the extra money we have has been going into RRSP's. Since we are not first time home buyers we were thinking of grabbing the 5% we need to secure the property and repay it when our house sells. Wondering what your thoughts are on this situation. Thanks


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## Dana (Nov 17, 2009)

swanhills_ca said:


> ...going into RRSP's. Since we are not first time home buyers we were thinking of grabbing the 5% we need to secure the property and repay it when our house sells.



Please clarify...do you mean you are contemplating 'grabbing' the 5% from your RRSP? 

If so, you will be taxed on the amount you withdraw (since you don't qualify for HBP). Also, you cannot 're-use' RRSP contribution room like you can with a TFSA, so when you repay the withdrawn amount you need to make sure you have the contribution room available to contribute the amount you withdrew. 

You are taking a risk carrying two properties as you have to be prepared that the house you are selling may not sell/ may take longer to sell than you have planned for/ may not sell for the price you are expecting.

Whatever you decide, good luck


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## the-royal-mail (Dec 11, 2009)

Dana makes a good point and it deserves further comment. Think of the WORST case scenario, not the best, when making financial moves such as this one. In this case, that would be if your present house does not sell as quickly as you think it will. I have been through that situation no less than twice, throw in a nasty recession, job loss of one or both spouses, more time than expected to find a new job and you've got a perfect storm for financial ruin.

Selling a house is not as easy as everyone seems to think.

Think in terms of the worst case scenario here. Can you handle it? If yes, then you might want to consider buying your ideal house now while it's available. But consider the possibilities very carefully and remember there will always be another house to buy later when the timing is a little better for you.


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