# First Time Home Buyer



## danielabowes (Jan 25, 2011)

Hello,

I am new to this forum and was wondering if I could ask for some advice.

My husband and I currently live, rent free, with my parents. We just got married in august 2010 and plan to live with my parents for the next 2-2.5 years in order to save for a down payment and furnishing for a house (we will move out of my parents home with the equivalent of a guest room amount of furniture).

Currently we are paying off the little credit card debt that we have (it will be paid off in full mid February, it was not a lot) and then we will pay off the remainder of my car loan (it was a 5 year loan I got in 2008, I did a few lump sum payments and the balance is $6874.18, this will be paid off mid May 2011). After that we will focus all of our extra money ($2800/month after our bills are paid) into three categories Down payment (and furniture) emergency fund, and gifts/vacations (Christmas gifts and one vacation tentatively planning for February 2012).

Currently we have nothing in our savings and $3600 in RSPs. I saved for our wedding and honeymoon for a year and paid in cash but left literally $1.50 in the savings and we have only this month gotten serious about saving once more.

Anyways, my questions are pretty basic:

• As a first time home buyer are there breaks that I will get tax wise (land transfer tax? Etc)
• Does it make more sense to contribute to short term RSPs then just a regular savings account? will it make a difference when it comes to buying a home?
• Do I need to pay a realtor or can I just look for homes myself and save the commission (have a lawyer look at the paperwork)?
• Are there incentives to purchase new builds as a first time home buyer (I thought I heard on the radio about a tax break)?
Any tips would be great!


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## GeniusBoy27 (Jun 11, 2010)

danielabowes said:


> Hello,
> 
> I am new to this forum and was wondering if I could ask for some advice.
> 
> ...


It would be helpful if you could give a location, because alot of things are municipally/provincially derived.

If you're looking at the HBP from your RRSP, I would contribute to short-term investments, just since you have a safer guaranteed sum that you can turn over quickly.

It almost ALWAYS makes sense to get a realtor, when you're a buyer. The key is finding the right realtor, who's going to be patient, and I'd start looking at houses now. Remember it's the SELLER that pays for your realtor, so why wouldn't you have one if you're the buyer?

RE: New homes have HST added on (which isn't true for resells). So perhaps the incentive is for the builder to pay your HST ...


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## kubatron (Jan 17, 2011)

...but when the builder pays your HST the price will / may already include HST. 

as a buyer technically you don't pay a realtor - the seller pays it. that being said IF you found a place you liked yourself you _may_ approach the listing agent and ask for them to represent both of you, BUT you _may_ encounter someone who won't do it because they want to double-end the deal (double commission). Otherwise if they do agree, you could get away with a 2% break on the price because what matters to the seller most is what the net proceeds are not what the sales price is.

wouldn't investing in your RRSP provide you with further tax relief, which you could use to further invest in RRSPs? Max $25K / person withdrawl.


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## I'm Howard (Oct 13, 2010)

First, do not rush into Home Ownership, by all means move from your Parents, but do the Math and ask yourself, Renting or owning??

Mortgages are at Historic Lows, do the Math, what if rates were 6.5% and one of you lost your jobs, could you hold onto the House???

I like your thought process, very much, you come across as a very mature individual.

RRSP's will generate Tax Refund, First Time Home Buyers withdrawal applies

I have owned numerous properties over the years, my choice now is to Rent, overruled by Wife, owning is important to Her, can't fight City Hall.


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## NotMe (Jan 10, 2011)

Hi, to explain better what the others are saying -- The reason why you should put it in an RRSP is this:

If you each save $25,000 in a savings account, you will pay income tax on the interest you earn. Alternatively, if put $25,000 each into an RRSP, wait 90 days, then you can (a) earn the tax deduction for putting the $25,000 in and (b) withdraw it using the first time home buyers program, with the only penalty being you have about 16 years to pay it back. Worst case scenario is that if you don't pay it back, each year $25,000/16 = $1562 will be added to your taxable income. So it's far better to put it in an RRSP -- BUT and this is a big BUT -- when you put in an RRSP, do not put it in the stock market, mutual funds, whatever. Put it in a 90 day GIC inside your RRSP. Your not doing this to earn money, your doing it to save taxes. You can't afford any drop in your downpayment.

As an unasked for aside though, I will say the majority of the couples I know who lived at home rent-free and then went out and bought a house quickly ran into financial troubles. I strongly recommend renting first; houses are very, very expensive to furnish, maintain and improve as needed. Even new houses, so renting gets you used to making payments at least. I rented for 8 years, owned a condo for 5... and still underestimated how much a house costs. Even little things (a lawnmower is $300, a ladder $200, etc)


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## danielabowes (Jan 25, 2011)

Thanks everyone for the advice!

Ok, so let’s see if I understand this:

Invest 25,000$ each (for a total of $50,000) into a 90day GIC in our RSPs so that we do not have to pay taxes on the interest. I am assuming the 90 day part is so that we can access it faster when it comes time to buy? We plan to save 60,000$ for a down payment and about 15,000$ to furnish the home. Would it be smart to keep the extra 25,000$ in a regular savings account? or should we spilt it into our TFSA and then keep the remaining 15,000$ in a savings account?

I do not think we are rushing into home ownership, we are looking for a home priced at 250,000$- 275,000$
If we got a 25 year mortgage at 6% with the 60,000$ down payment we would be looking at a mortgage payment of about 1,375.00$ monthly payment (most likely I would opt for bi-weekly to save on the interest) we would still have around 1,425$ a month to spend on food, heating hydro etc. Our current budget already accounts for our transportation expenses as well as our cell phones and cable that we pay my parents for. Also we currently have ‘FUN’ money to the tune of 400$/each a month that can be cut back if need be.

I dont want to rent, I feel very strongly about home ownership

Also my husband just left school and his current job is entry level and he is at the lowest per hour pay that he can be, so in the next two and a half years we expect his pay to go up.

Also, I work at the airport (Toronto international airport) and my husband works where we currently live in Bolton Ontario, so we are looking to have a house somewhere in Brampton which would keep our jobs close to our home.


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## LondonHomes (Dec 29, 2010)

kubatron said:


> ...but when the builder pays your HST the price will / may already include HST.


The HST only starts to apply on a new home worth over $400,000 in Ontario. The government will rebate any HST paid on a purchase price below that level. (Home Buying and the Ontario HST). So HST costs should not be a concern to a first time home buyer.

Always get your own REALTOR as a buyer it costs you nothing. Sellers will not factor any reduced commission into the selling price to save you money. And any commission reduction will be significantly less than the 2% previously quoted.


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## atrp2biz (Sep 22, 2010)

NotMe said:


> Hi, to explain better what the others are saying -- The reason why you should put it in an RRSP is this:
> 
> If you each save $25,000 in a savings account, you will pay income tax on the interest you earn. Alternatively, if put $25,000 each into an RRSP, wait 90 days, then you can (a) earn the tax deduction for putting the $25,000 in and (b) withdraw it using the first time home buyers program, with the only penalty being you have about 16 years to pay it back. Worst case scenario is that if you don't pay it back, each year $25,000/16 = $1562 will be added to your taxable income. So it's far better to put it in an RRSP -- BUT and this is a big BUT -- when you put in an RRSP, do not put it in the stock market, mutual funds, whatever. Put it in a 90 day GIC inside your RRSP. Your not doing this to earn money, your doing it to save taxes. You can't afford any drop in your downpayment.
> 
> As an unasked for aside though, I will say the majority of the couples I know who lived at home rent-free and then went out and bought a house quickly ran into financial troubles. I strongly recommend renting first; houses are very, very expensive to furnish, maintain and improve as needed. Even new houses, so renting gets you used to making payments at least. I rented for 8 years, owned a condo for 5... and still underestimated how much a house costs. Even little things (a lawnmower is $300, a ladder $200, etc)


Without understanding the OP's income and other information, I would not suggest putting money into RRSPs. RRSPs are not tax-free vehicles--they are tax deferrals. I wish I did not contribute to my RRSP earlier in my career as the contribution room would have allowed me to further reduce my taxable income now (with my income is significantly higher than earlier in my career). 

I feel that building a solid foundation for a downpayment through a TFSA over the next 12-18 months is the way to go.


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## NotMe (Jan 10, 2011)

You can make a rrsp payment one year and defer taking the tax credit until you earn more years later.

One option would be put it in the TFSA for 12 months, and then drop it in an RRSP and withdraw it in 90 days and get a tax credit.. if you want it. @ OP - the point of putting it in an RRSP is more about saving taxes (now or later) than about the tax free growth - that's a nice bonus.

As another unasked for aside, I would look on this forum and others about living in Brampton. From what I've read, it's not the most desireable neighbourhood -- i'm not looking to start a flame war, just advising the OP to research carefully any place they wish to live. Renting gives a taste of a neighbourhood without the perils involved.


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## GeniusBoy27 (Jun 11, 2010)

I think given your time frame, budget, etc ... I would maximize a TFSA first as well.

You should be able to get a MUCH lower mortgage rate than 6%. If you aren't, then you aren't negotiating well enough. Go to a mortgage broker if you need to. I'm in the process of getting a 3.4% blend and extend mortgage that's fixed.

I think your estimation of $15000 to furnish a house is really low. If you include things like lawnmowers and other stuff that you'd like to get. 

But best of luck!


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## atrp2biz (Sep 22, 2010)

NotMe said:


> You can make a rrsp payment one year and defer taking the tax credit until you earn more years later.
> 
> One option would be put it in the TFSA for 12 months, and then drop it in an RRSP and withdraw it in 90 days and get a tax credit.. if you want it. @ OP - the point of putting it in an RRSP is more about saving taxes (now or later) than about the tax free growth - that's a nice bonus.
> 
> As another unasked for aside, I would look on this forum and others about living in Brampton. From what I've read, it's not the most desireable neighbourhood -- i'm not looking to start a flame war, just advising the OP to research carefully any place they wish to live. Renting gives a taste of a neighbourhood without the perils involved.


I realize that one can defer the tax "credit", but there is no point in contributing if the funds will be needed before the "credit" is realized. I emphasize credit because it is not a credit. It is a vehicle to reduce net income. The value of this reduction of net income is maximized at higher income levels. Therefore the value of RRSPs come from tax-free growth and deferred tax payments. I would argue that tax-free growth is the primary purpose of an RRSP.

Pre-tax contribution*(1+g)^n*(1-t) >> Pre-tax contribution*(1-t)*[1+g(1-t)]^n, even if tax levels in both instances are the same.

In any case, maximizing your savings through a TFSA should be a priority.


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## danielabowes (Jan 25, 2011)

NotMe said:


> You can make a rrsp payment one year and defer taking the tax credit until you earn more years later.
> 
> One option would be put it in the TFSA for 12 months, and then drop it in an RRSP and withdraw it in 90 days and get a tax credit.. if you want it. @ OP - the point of putting it in an RRSP is more about saving taxes (now or later) than about the tax free growth - that's a nice bonus.
> 
> As another unasked for aside, I would look on this forum and others about living in Brampton. From what I've read, it's not the most desireable neighbourhood -- i'm not looking to start a flame war, just advising the OP to research carefully any place they wish to live. Renting gives a taste of a neighbourhood without the perils involved.


I lived in Brampton before, it was a desirable place to live before, but it is getting worse and worse. We moved to Bolton, just north east of Brampton, about 10 years ago. We would rather continue to live in Bolton, but the prices of homes are quite high.


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## NotMe (Jan 10, 2011)

But why wouldn't you save the funds in a TFSA as you suggest for 2 years or whatever but three months before funds are required, take it all out and put in an RRSP (GIC), leave it for 90 days, and then withdraw it using HBP and forward it as her downpayment. 

This assumes she has TFSA and RSP room, etc but she likely does in both cases, and that there will be additional funds for closing/furnishing, etc (ie it's not coming from that $50K). Even if it was however, just put less in the RRSP. 

What am I missing? She gets the TFSA benefit for 2 years, builds room in it for next year by withdrawing it, either gets a great tax refund or sets herself up for one later, and has no risk of losing money. Only thing she has to do is repay the loan to herself at 0% (1/16th at a time, which isn't so onerous).


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## danielabowes (Jan 25, 2011)

GeniusBoy27 said:


> I think given your time frame, budget, etc ... I would maximize a TFSA first as well.
> 
> You should be able to get a MUCH lower mortgage rate than 6%. If you aren't, then you aren't negotiating well enough. Go to a mortgage broker if you need to. I'm in the process of getting a 3.4% blend and extend mortgage that's fixed.
> 
> ...


Thanks for your advice! I used 6% as the worst case senario, kind of to show a mortgage managability for us at our current income. Also, we got a lot of stuff as gifts, lawnmower included, when we got married. We got towels and electronics and a TV and lamps etc. So what we would be looking for to furnish is a couple of couches, a coffee table, a kitchen table and chairs. We are also not above buying gently used and re-finishing wood/paiting.


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## danielabowes (Jan 25, 2011)

NotMe said:


> But why wouldn't you save the funds in a TFSA as you suggest for 2 years or whatever but three months before funds are required, take it all out and put in an RRSP (GIC), leave it for 90 days, and then withdraw it using HBP and forward it as her downpayment.
> 
> This assumes she has TFSA and RSP room, etc but she likely does in both cases, and that there will be additional funds for closing/furnishing, etc (ie it's not coming from that $50K). Even if it was however, just put less in the RRSP.
> 
> What am I missing? She gets the TFSA benefit for 2 years, builds room in it for next year by withdrawing it, either gets a great tax refund or sets herself up for one later, and has no risk of losing money. Only thing she has to do is repay the loan to herself at 0% (1/16th at a time, which isn't so onerous).


All of this is way above my head. I think I will have to go to my bank and get a crash course in RSPs and TFSA. My Husband and I both have a TFSA each and RSPs (his was emptied for school tuition).


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## atrp2biz (Sep 22, 2010)

It's all about income levels. If the OP is making $125,000 a year, I'm all for contributing to the RRSP and withdrawing under the HBP. If the OP is making $25,000 a year, the tax reduction would be significantly less and the contribution room would be lost for when/if income is higher down the road. The difference between can be >20%.

EDIT: Actually, the difference could be double. $25,000 is in the 20% marginal rate in Ontario and $84,000 is in the 43% marginal rate.


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## marina628 (Dec 14, 2010)

It cost me $2000 for Curtains , Rods ,shelving ,lamps , little bits of crap we all need to be comfortable.Lawn mower ,water hoses ,snow blower etc ,all adds up.My old semi in Brampton just sold for $287,000 ,look on mls.ca for houses you like ,check out taxes etc before you buy.
Also appliances ,if you have to buy your own ,even cheap will set you back a few thousand.
In 2003 my Nephew bought a $258,000 house with $75,000 down .Today he has two kids and struggling to pay his bills because they didn't account for daycare and his wife losing 50% of her paycheck .Definitely plan to keep at least 4 months living expenses in a savings account after you buy although most will say 6-12 .


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## I'm Howard (Oct 13, 2010)

My youngest Son is a potential first time home buyer, He has access to well over $100,000 cash, He chooses to continue to Rent as it is far less expensive than owning, and is convinced that the eventual rise of interest rates will put many homes on the market.

Today's rates are unrealistically low, 10% may be back in a few years.

I am in Florida, some Homes have been on the market for over four years.


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## atrp2biz (Sep 22, 2010)

We're moving to Calgary in the spring/early summer and looked online to see what price to list our house on the market. I was shocked to see the appreciation of homes in my area. Townhomes are going for $450k+. Semis as going for $550+. Three years ago when we bought a 4-bedroom house for $515k, we thought the market was overvalued. 

There is another thread on this, but I'm not sure what the new reality of real estate is in Canada. But comparing Florida with Ontario or even Canada is like comparing apples and oranges, especially in the urban markets of Canada.


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## danielabowes (Jan 25, 2011)

marina628 said:


> It cost me $2000 for Curtains , Rods ,shelving ,lamps , little bits of crap we all need to be comfortable.Lawn mower ,water hoses ,snow blower etc ,all adds up.My old semi in Brampton just sold for $287,000 ,look on mls.ca for houses you like ,check out taxes etc before you buy.
> Also appliances ,if you have to buy your own ,even cheap will set you back a few thousand.
> In 2003 my Nephew bought a $258,000 house with $75,000 down .Today he has two kids and struggling to pay his bills because they didn't account for daycare and his wife losing 50% of her paycheck .Definitely plan to keep at least 4 months living expenses in a savings account after you buy although most will say 6-12 .


Since this seems to be such an issue for everyone, let me just say that I feel no need to furnish rooms that we will not use the moment we own the home. 
We have a decent set up right now that includes a queen sized bed, two bedside tables, curtains, a large rug, pictures to decorate the walls and a 42 inch flat screen, and a bench that currently sits at the end of our bed. Oh and a dresser and two book shelves and a pedestal table that my Husband made in school (he is a cabinet maker).

A couple of couches will cost us say, 1,800$ (http://www.leons.ca/shared/product/product.aspx?ItemId=0&ChildItemId=1425485 and http://www.leons.ca/shared/search/s...ryId=20&CategoryFamilyId=1577&PriceRangeId=64 ) the couch even doubles as a pull out for guests.

a coffee table 310$ http://www.leons.ca/shared/product/product.aspx?ItemId=0&ChildItemId=1391700 

A kitchen table set: 1,130 http://www.leons.ca/shared/product/product.aspx?ItemId=1506740&ChildItemId=1502660 

A washer dryer 1,128$ http://www.leons.ca/shared/product/product.aspx?ItemId=1424880&ChildItemId=1424880 

I have all the essentials to have a living room, master bedroom and kitchen, plus a washing machine and a dryer.

I still have 10,632$

A desk to work at (even though we could use our laptops at the kitchen table) 281$ http://www.leons.ca/shared/product/product.aspx?ItemId=0&ChildItemId=144395 we can even borrow a chair from the kitchen for this desk.
If the house doesn’t come with a fridge or stove I can get a stove fridge and dishwasher for 1,694$ http://www.leons.ca/shared/product/product.aspx?ItemId=0&ChildItemId=1507420 

And I still have 8,657$ 

And now maybe I can get a wall unit to have the TV in instead of hanging it on the wall, and a place for all the movies we have for 1,807 http://www.leons.ca/shared/product/product.aspx?ItemId=1457807&ChildItemId=1457807

So say it costs me 2,000$ for curtains rods lamps and all the bits of crap I still have 4,850$

Let’s say I spend that 4,850$ on more towels, a bath mat, a household amount of paint, a garbage can for the kitchen, maybe a second TV so we can have one in the bedroom and one in the living room. I think 15,000$ is more than enough to be comfortable.

And this is without shopping around. This is just going to Leons website and seeing what I think looks nice without being outrageously expensive.

I am not trying to be rude, but I know my tastes are not extravagant and that I am more than happy to re-finish gently used furniture.


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## NotMe (Jan 10, 2011)

atrp2biz said:


> It's all about income levels. If the OP is making $125,000 a year, I'm all for contributing to the RRSP and withdrawing under the HBP. If the OP is making $25,000 a year, the tax reduction would be significantly less and the contribution room would be lost for when/if income is higher down the road. The difference between can be >20%.
> 
> EDIT: Actually, the difference could be double. $25,000 is in the 20% marginal rate in Ontario and $84,000 is in the 43% marginal rate.


Agreed. But anyone making a household income of $50,000 should not be considering buying a house anywhere in the GTA.

Also re: furnishing a house - I guess the main point is that when you buy a house having never had one before, you have to buy a lot of things you don't think about. I didn't know a lawnmower cost $500, a ladder $200, new shelving $500, a new garage door opener $300, updating our will and powers of attorney ($500), lawncare $200, changing locks ($200) etc etc etc... that is part of furnishing even if they're not furniture. Also since it's likely a resale house you're looking at, there WILL be unexpected expenses - fixing illegal wiring that was hidden $500, etc. Nothing to do with extravagent tastes or frugal spending, just that it is what it is.


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## danielabowes (Jan 25, 2011)

NotMe said:


> Agreed. But anyone making a household income of $50,000 should not be considering buying a house anywhere in the GTA.
> 
> Also re: furnishing a house - I guess the main point is that when you buy a house having never had one before, you have to buy a lot of things you don't think about. I didn't know a lawnmower cost $500, a ladder $200, new shelving $500, a new garage door opener $300, updating our will and powers of attorney ($500), lawncare $200, changing locks ($500) etc etc etc... Also since it's likely a resale house you're looking at, there WILL be unexpected expenses - fixing illegal wiring that was hidden $500, etc. Nothing to do with extravagent tastes or frugal spending, just that it is what it is.


To be honest, these costs are besides the point. I am asking about where I shuold keep the money for my downpayment as I put it aside for the next two and a half years.


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## crazyjackcsa (Aug 8, 2010)

NotMe said:


> Agreed. But anyone making a household income of $50,000 should not be considering buying a house anywhere in the GTA.
> 
> Also re: furnishing a house - I guess the main point is that when you buy a house having never had one before, you have to buy a lot of things you don't think about. I didn't know a lawnmower cost $500, a ladder $200, new shelving $500, a new garage door opener $300, updating our will and powers of attorney ($500), lawncare $200, changing locks ($500) etc etc etc... Also since it's likely a resale house you're looking at, there WILL be unexpected expenses - fixing illegal wiring that was hidden $500, etc. Nothing to do with extravagent tastes or frugal spending, just that it is what it is.


Sure, but a first time home buyer often gets all sorts of stuff from family members. Everybody I know (from all income levels) got lawnmowers, old furniture, ladders, tools, book cases, tables, lamps, old appliances and all sorts of stuff from family.

You may only get 5 years out of the mower, the ladder may not be the right size, the furniture could be thread bare... but the only thing I bought for the house was a queen size bed and a dining room table.

As for the downpayment, and the time line, I'd let it sit in a high interest savings account and call it a day.


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## danielabowes (Jan 25, 2011)

crazyjackcsa said:


> Sure, but a first time home buyer often gets all sorts of stuff from family members. Everybody I know (from all income levels) got lawnmowers, old furniture, ladders, tools, book cases, tables, lamps, old appliances and all sorts of stuff from family.
> 
> You may only get 5 years out of the mower, the ladder may not be the right size, the furniture could be thread bare... but the only thing I bought for the house was a queen size bed and a dining room table.
> 
> As for the downpayment, and the time line, I'd let it sit in a high interest savings account and call it a day.


If you'll look at my post in post #20 you will see that i spoke of all of this.


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## Addy (Mar 12, 2010)

danielabowes said:


> If you'll look at my post in post #20 you will see that i spoke of all of this.


I never got anything from my family when we bought our first home. I am a bit jealous of people who are so close to their families like this.... seriously, I am a bit jealous. Hopefully my daughter will remain close to us so I can pass on stuff to her.


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## danielabowes (Jan 25, 2011)

Addy said:


> I never got anything from my family when we bought our first home. I am a bit jealous of people who are so close to their families like this.... seriously, I am a bit jealous. Hopefully my daughter will remain close to us so I can pass on stuff to her.


I guess we are really luck. My family was generous at the wedding and they are allowing us to live with them as long as we need.


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## Four Pillars (Apr 5, 2009)

danielabowes said:


> To be honest, these costs are besides the point. I am asking about where I shuold keep the money for my downpayment as I put it aside for the next two and a half years.


My suggestion is to:

1) Keep all the down payment money (regardless of the account) in very safe investments such as GICs (maturing before you buy the house) or high interest savings account. If you are not sure why I'm suggesting this - here is a post which explains: http://www.abcsofinvesting.net/investment-time-horizon/

2) I'm a fan of the RRSP Home Buyers Plan. I would suggest that you contribute enough to your RRSP from your down payment so that you can each take out $25k from your RRSPs when the time comes. This is assuming you are both working and get a decent tax break from RRSPs.

Once you have enough in the RRSPs to cover the HBP, then I would save the remainder of the down payment in your TFSA (if there is room). That way, any interest earnings will be tax-free. Any extra down payment will have to go in a non-registered account and the earnings will be taxable.


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## I'm Howard (Oct 13, 2010)

30 months, you really have no alternative, either GIC or ALLY/ING, depending who pays the most.

Stocks, Bonds etc are a minimum five year hold.

SDT trades on the NYSE , Yields about 7%, BCE also has nice yield, but these are longer termcommittments.


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## kcowan (Jul 1, 2010)

danielabowes said:


> ...Also, I work at the airport (Toronto international airport) and my husband works where we currently live in Bolton Ontario, so we are looking to have a house somewhere in Brampton which would keep our jobs close to our home.


Moving to Brampton makes a lot of sense for you both. You should have a look at rental inventory there just to satisfy yourself that purchase still makes sense. The savings in gas and wear and tear should be factored into the cost of the move.


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## I'm Howard (Oct 13, 2010)

Houses are less expensive in Brampton, and there are reasons.

Bolton is nicer.


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## rookie (Mar 19, 2010)

I'm Howard said:


> Houses are less expensive in Brampton, and there are reasons.
> 
> Bolton is nicer.


and what exactly are the reasons, may i ask?


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## kubatron (Jan 17, 2011)

Brampton generally is not as favourable as Milton, Bolton or Mississauga just in general. It's like someone asking why the Beaches are more expensive vs Leslieville or Riverdale being more as well. Just the way it 'is'.


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## rookie (Mar 19, 2010)

kubatron said:


> Brampton generally is not as favourable as Milton, Bolton or Mississauga just in general. It's like someone asking why the Beaches are more expensive vs Leslieville or Riverdale being more as well. Just the way it 'is'.


hmm... not a convincing answer. what you are quoting is some areas being more favourable than others. but this is an entire town. i understand scarborough or jane and finch areas which have a higher crime rate causing prices to go below gta average. but brampton confounds me. is it availability of jobs? demographics? bad schools or municipality? bad facilities? any logical explanations?


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## K-133 (Apr 30, 2010)

rookie said:


> hmm... not a convincing answer. what you are quoting is some areas being more favourable than others. but this is an entire town. i understand scarborough or jane and finch areas which have a higher crime rate causing prices to go below gta average. but brampton confounds me. is it availability of jobs? demographics? bad schools or municipality? bad facilities? any logical explanations?


Are you really asking why? Or are you arguing that it doesn't make sense for a whole town to be considered less attractive than another?

Why do more people live in Toronto than Ottawa?


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## NotMe (Jan 10, 2011)

More people live in Toronto than Ottawa because more people have come here in previous years, built infrastructure, jobs etc that then need more people. It's why there are more people in Toronto than in Edmonton, etc. Get more people to go to Edmonton this year, and more people next year will go. 

As for the question of Brampton, visit http://forums.redflagdeals.com/brampton-good-area-buy-new-home-735535/25/ for a primer on the wide array of views.

One thing that often comes up when discussing brampton, is the perception that the majority of the residents are south asian. This often spirals down into accusations of racism, etc as some will say that not everyone wants to be 'dominated' by a particular ethnic group which can affect resale value later and then others call them racists, etc (whcih maybe they are). While I am certainly not advocating racism, I don't think we should ignore that it is a real thing in the world and that it plays out, especially in the real estate market. In short, if a house in Toronto costs $600,000 and in Mississauga $300,000 and in Brampton $200,000, there are reasons for this. It's not arbritrary.


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## Berubeland (Sep 6, 2009)

If your house is a status symbol, sure you don't want to buy a house in Brampton or Scarborough... personally the houses in Brampton as a general rule are just as warm and dry as anywhere else so paying for the postal code is just stupid IMHO. 

It's even more stupid to pay more than you can comfortably afford because of this imagined status. Sure if you have lots of dough already, go ahead and buy a yacht if you want, or a house on Post Rd. You do this once you have "arrived" not when you're starting out. 

No one discusses the effect of unaffordable houses on couples either. Considering that most couple fight about money I would assume less debt=less strain = more fun.


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## Four Pillars (Apr 5, 2009)

NotMe said:


> if a house in Toronto costs $600,000 and in Mississauga $300,000 and in Brampton $200,000, there are reasons for this. It's not arbritrary.


Proximity to the downtown core is likely a big factor. Toronto is closest, Mississauga is a bit farther away and Brampton is even further.


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## marina628 (Dec 14, 2010)

I lived in Brampton for 16 years and moved from there in 2001.We lived in 'heart Lake area' which is the north end.The main reason we moved was traffic became horrible.When we left in 2001 there was 225,000 people there and now about 450,000.
Before you buy in Brampton go there and stay over on a week night then get up and drive to work.I had friends who bought there and worked downtown , they sold 9 months later as it took them 1.5 hours to get to work.The 410 traffic in the morning is horrible as soon as you hit Steeles.There are great parks there ,libraries and rec centers .Most of it is safe although near city Center Kennedy /Queen area there is known drug activity.


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## marina628 (Dec 14, 2010)

http://www.realtor.ca/propertyDetails.aspx?propertyId=10176750&PidKey=843229898 These are the sort of homes in North End of Brampton.
Not sure what you think you can get for $200,000 in Brampton ,this townhouse is $322,000!http://www.realtor.ca/propertyDetails.aspx?propertyId=10269212&PidKey=-798174944


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## danielabowes (Jan 25, 2011)

marina628 said:


> I lived in Brampton for 16 years and moved from there in 2001.We lived in 'heart Lake area' which is the north end.The main reason we moved was traffic became horrible.When we left in 2001 there was 225,000 people there and now about 450,000.
> Before you buy in Brampton go there and stay over on a week night then get up and drive to work.I had friends who bought there and worked downtown , they sold 9 months later as it took them 1.5 hours to get to work.The 410 traffic in the morning is horrible as soon as you hit Steeles.There are great parks there ,libraries and rec centers .Most of it is safe although near city Center Kennedy /Queen area there is known drug activity.


I drive through brampton every day now to get to work. EVERYDAY. I UNDERSTAND THE TRAFFIC, the congestion IS a problem. I also LIVED in Brampton. and i have family who LIVE in Brampton. 

My question has nothing to Do with BRAMPTON it has to do with how to best save my MONEY.


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## danielabowes (Jan 25, 2011)

marina628 said:


> http://www.realtor.ca/propertyDetails.aspx?propertyId=10176750&PidKey=843229898 These are the sort of homes in North End of Brampton.
> Not sure what you think you can get for $200,000 in Brampton ,this townhouse is $322,000!http://www.realtor.ca/propertyDetails.aspx?propertyId=10269212&PidKey=-798174944


I have been looking and I never said $200,000 i said 250,000-275,000 we are able to go as high as 300,000 comfortablly. 

there ARE hosues available in brampton in our price range.

WHY is everyone focusing on Brampton and furnishing a house when I asked about savings money?

ETA:
Also, I never said I wanted to live in the north end, I have looked at posting for Brampton and I know what it costs to live north.


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## Four Pillars (Apr 5, 2009)

danielabowes said:


> I drive through brampton every day now to get to work. EVERYDAY. I UNDERSTAND THE TRAFFIC, the congestion IS a problem. I also LIVED in Brampton. and i have family who LIVE in Brampton.
> 
> My question has nothing to Do with BRAMPTON it has to do with how to best save my MONEY.


And your question has been answered - several times.


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## danielabowes (Jan 25, 2011)

Four Pillars said:


> And your question has been answered - several times.


Actually, my question has been answered differently several times so basically I have gained nothing.


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## Toronto.gal (Jan 8, 2010)

Several people have taken the time to read your post and try to help you and all you can do is give sarcastic comments? 

You said you were not trying to be rude, but you have been!


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## danielabowes (Jan 25, 2011)

Toronto.gal said:


> Several people have taken the time to read your post and try to help you and all you can do is give sarcastic comments?
> 
> You said you were not trying to be rude, but you have been!


No I am not being rude. It’s very frustrating when you as a question, people argue about it amongst themselves, then go off topic about the city I am looking to live in and how much it would cost to furnish. It like some ridiculous skit from Monty Python.


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## marina628 (Dec 14, 2010)

You will get different opinions here and at end of day weight them all and do what makes best sense for you.If it were me i would be saving everything in RSP to take advantage of the tax break then use the RSP to buy a home.
As for where you put this RSP ,You can get a GIC for the cash you have now but monthly contributions would mean you are limited to shorter GIC terms.
This is what I would do and this is just my opinion ,my favorite investment product for my RSP is Canadian Equity Funds Or Balanced funds ,All banks have them .I bank with TD so here is their link https://www.tdcanadatrust.com/mutualfunds/prices.jsp .Statistically they have done well and i have been buying them for years at TD and Scotiabank .I would be putting my monthly contributions in very low risk mutual funds which probably will pay better than the GIC.Again just my opinion and this is what I would do .If you want 100% security you only options in RSP would be the GIC Route.


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## NotMe (Jan 10, 2011)

danielabowes said:


> No I am not being rude. It’s very frustrating when you as a question, people argue about it amongst themselves, then go off topic about the city I am looking to live in and how much it would cost to furnish. It like some ridiculous skit from Monty Python.


We're not robots, we're people. Sometimes conversations with humans start on one topic and move on. Relax. It's also possible this thread is not only of use to you, and there may be others on the planet who aren't as knowledgeable as you about Brampton or whatever and might find the information helpful? If you don't like the advice you get here, may I humbly suggest you ask for a refund of the money you paid for it.


If there was one answer, one way, one solution to any problem, there wouldn't be any problems. It's a truism that two methods, opposite in every way, can still solve the same problem in their own ways.


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## Four Pillars (Apr 5, 2009)

danielabowes said:


> No I am not being rude. It’s very frustrating when you as a question, people argue about it amongst themselves, then go off topic about the city I am looking to live in and how much it would cost to furnish. It like some ridiculous skit from Monty Python.



Lol. You've just described every thread on this forum.

I'm sorry you couldn't learn anything from the wealth of information in this thread.


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## Sherlock (Apr 18, 2010)

If you and your husband live with your parents, how does sex work? Do you have to wait till they leave the house to do it? Or do you just not care if they hear you going at it?

Why are you guys recommending 90 day GICs? Don't those pay like 0.3% interest? You may as well just store your money under your mattress. If you're only willing to invest in low-risk guaranteed investments, then saving your money in a RRSP or TFSA is pointless because the amount of tax you'll save on your interest is negligible.

I recommend saving your money in no-load mutual funds rather than a GIC or savings account. I happen to hold the belief that a balanced mutual fund portfolio is a great place to store money even if you'll need that money in the near future.


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## Sherlock (Apr 18, 2010)

NotMe said:


> Agreed. But anyone making a household income of $50,000 should not be considering buying a house anywhere in the GTA.
> 
> Also re: furnishing a house - I guess the main point is that when you buy a house having never had one before, you have to buy a lot of things you don't think about. I didn't know a lawnmower cost $500, a ladder $200, new shelving $500, a new garage door opener $300, updating our will and powers of attorney ($500), lawncare $200, changing locks ($200) etc etc etc... that is part of furnishing even if they're not furniture. Also since it's likely a resale house you're looking at, there WILL be unexpected expenses - fixing illegal wiring that was hidden $500, etc. Nothing to do with extravagent tastes or frugal spending, just that it is what it is.


There is no law that says you have to buy all that furniture all at once. You can buy it over months or even years. For example, what do you need a lawnmower for when the ground is covered with snow? You can wait several months to buy one. Likewise you don't have to fix eveyr little broken thing immediately.


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## Sherlock (Apr 18, 2010)

danielabowes said:


> All of this is way above my head. I think I will have to go to my bank and get a crash course in RSPs and TFSA.


A bank is going to give you biased information because they're in the business of making money by selling you their products (eg their high-MER mutual funds) which will not necessarily be the best option for you. You'll be better off spending the time to read forums such as this one and learning that information on your own. One good financial blog I recommend for you is www.greaterfool.ca, it's written by a former minister of national revenue.


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## marina628 (Dec 14, 2010)

danielabowes said:


> I have been looking and I never said $200,000 i said 250,000-275,000 we are able to go as high as 300,000 comfortablly.
> 
> there ARE hosues available in brampton in our price range.
> 
> ...


My post was in reference to NOTME saying In short, if a house in Toronto costs $600,000 and in Mississauga $300,000 and in Brampton $200,000, there are reasons for this. It's not arbritrary. Not in reference to your budget


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

Sherlock said:


> A bank is going to give you biased information because they're in the business of making money by selling you their products (eg their high-MER mutual funds) which will not necessarily be the best option for you. You'll be better off spending the time to read forums such as this one and learning that information on your own. One good financial blog I recommend for you is www.greaterfool.ca, it's written by a former minister of national revenue.


100% agreed. Excellent post. I hope the OP reads it before jumping into the lion's den.

Good blog, too! Love the comment: "First, stop with the insane mortgage payments." Finally someone (other than me) said it. Too many people these days seem to think that top priority should be in the mortgage and RRSPs. And now RESPs are starting to take hold. 

The housing market is a mess for sure, as the gains are very artificial. How much are you really gaining on a Vancouver house that's costing you thousands in taxes and unsaleable as mentioned in the blog? Even if I was on side with home ownership, these modern prices are way out of line and what's suffering is the financial freedom of the buyers. They're heavily burdened with debt.


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## HaroldCrump (Jun 10, 2009)

Sherlock said:


> If you and your husband live with your parents, how does sex work? Do you have to wait till they leave the house to do it? Or do you just not care if they hear you going at it?


Apparently, it is not a problem for 2/3rd of the rest of the world.

I have traveled extensively to South Asia and the Far East on a past job and it is quite traditional for folks to life with their parents.
It is known as the "joint family" system there.
On a joint trip to India, Singapore and Malaysia the local manager dude that was showing me around was in his mid 40s, had a wife and 4 kids and lived with his parents (who were in their 70s).

I didn't ask about their nookie arrangements, but given the population numbers in that part of the world, I don't think that is a problem


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## Pigzfly (Dec 2, 2010)

If you choose to go the RRSP route, watch for teaser rates around contribution time. You can get some pretty high rates for 90 day GICs to open accounts from places like ING. They do it because it basically locks in your money with them, as it can be a hassle to move it later on.


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## Plugging Along (Jan 3, 2011)

HaroldCrump said:


> Apparently, it is not a problem for 2/3rd of the rest of the world.
> 
> I have traveled extensively to South Asia and the Far East on a past job and it is quite traditional for folks to life with their parents.
> It is known as the "joint family" system there.
> ...


 This post made me laugh the most! Thanks Harold & Sherlock for the post. I think if the OP was annoyed with the posts going on a tangent before, this one should really make the OP wonder. LMBO


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## Cal (Jun 17, 2009)

danielabowes said:


> Hello,
> 
> I am new to this forum and was wondering if I could ask for some advice.
> 
> ...



I will weigh in with my 2c worth.
I think the tax breaks have already been mentioned above.
Personally I am not a fan of withdrawing from the RRSP for home purchases. I don't like to lose out on the compounding interest that can occur with in the RRSP. I know most people don't think that way, thats partly why I offered my opinion.
Without using a realtor, you may be able to reduce your price, but with a realtor, you will probably be able to reduce your price too. In the case of an inexperienced buyer, I am sure that you would find a realtor to be a great help to you throughout the process.
Resale homes and builders can both offer incentives for you to buy. It really depends on how bad they want to make the sale. I have seen builders throw in 30K of upgrades no charge, or sellers not only reducing the price but including the dining room set and such....


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## ScubaJack (Feb 10, 2011)

*books*



danielabowes said:


> All of this is way above my head. I think I will have to go to my bank and get a crash course in RSPs and TFSA. My Husband and I both have a TFSA each and RSPs (his was emptied for school tuition).


I was pretty clueless on a lot of this stuff, but once you start the ball rolling the learning comes easier. I found the "wealthy barber", and "the investment book" great starting resources.

My fiancée and I are in the same boat - first time home buyers in the GTA. We are going the TFSA, RRSP, and mutual fund route for our savings and it has been working very well for us. There may be better ways, but a lot of them involve more active control and with the wedding coming this summer I just don't want the added work. 

I wish you the best of luck - it is good to hear from someone that is tackling the same situation even if it is from different circumstances. Personally, I see the markets being pushed into correction so I think the landscape will be decidedly different when we pull the trigger to buy. I just hope it is downward and not skyward.


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