is pulling RRSP for first time home buyer a smart thing to do?

[GQBalla]

im just wondering, is pulling RRSP for first time home buyer a smart thing to do?

just wondering because i have to pay it back eventually, i don't know the terms yet.

am i allowed to pull out a portion and the other bit of the down payment from my savings?

or should i pull all from RRSP?

[The_Rural_Juror]

yes to all (for most people).

[ExtraSlow]

If you have non RRSP savings, use those first. But no problem with using Home Buyers Plan for the house downpayment.

[GQBalla]

Originally posted by The_Rural_Juror
yes to all (for most people).

when you say most people, what do you mean by that?

Originally posted by ExtraSlow
If you have non RRSP savings, use those first. But no problem with using Home Buyers Plan for the house downpayment.

ah so i should drop some savings on top of my rrsp and just withdraw a portion of my rrsps?

[cdnsir]

Hell yeah it's a good deal. You have 15 years to pay back that 25k, with you having to repay a min. of 1/15 of the total per year.

25k that goes towards your down pmt will offset the potential gains you could get investing inside your RRSP most of the time. That is unless you're great at playing with stocks, then you might be better off with growing that 25k for your retirement.

[GQBalla]

Originally posted by cdnsir
Hell yeah it's a good deal. You have 15 years to pay back that 25k, with you having to repay a min. of 1/15 of the total per year.

25k that goes towards your down pmt will offset the potential gains you could get investing inside your RRSP most of the time. That is unless you're great at playing with stocks, then you might be better off with growing that 25k for your retirement.

hrm yeah just found that out too.

seems like a good deal put down 1000 bucks a year for 15 years and i pay back my RRSP.

[barmanjay]

Take advantage of all programs you can find

"A penny saved is a penny earned"

[kaput]

.

[lint]

Originally posted by kaput
Keep in mind that you don't get any additional tax credits/deductions when you make your repayments, which is really shitty when your income is higher 5 years from now and you really want that refund.

There's no rule that every dollar you contribute to your RRSP has to go towards repayment of the HBP. So make your minimum payment and the rest of the money you put towards your RRSP can be considered new contribution.

[max_boost]

I would go ask your parents to borrow a lump sum for down payment instead. It's the Asian way of doing things. Tell them you are growing up, mature, ready to be responsible. Asian parents are all about real estate man. They won't lend you money to buy R&R jeans or to pimp hoes but they'll lend you the money interest free to buy a house and some day down the road, they might just go "son, don't worry about paying us back".

[Masked Bandit]

Originally posted by lint


There's no rule that every dollar you contribute to your RRSP has to go towards repayment of the HBP. So make your minimum payment and the rest of the money you put towards your RRSP can be considered new contribution.

This^^^^

The other thing to consider is that if you can through and extra $10,000 or $15,000 at your down payment from your RRSP, that may save you a bunch of money that you would have pissed away in CMHC fees.

[GQBalla]

Originally posted by max_boost
I would go ask your parents to borrow a lump sum for down payment instead. It's the Asian way of doing things. Tell them you are growing up, mature, ready to be responsible. Asian parents are all about real estate man. They won't lend you money to buy R&R jeans or to pimp hoes but they'll lend you the money interest free to buy a house and some day down the road, they might just go "son, don't worry about paying us back".

LOL sound advice, i have yet to ask though.

i might get lucky since im the youngest

[Dumbass17]

HBP?

[no_joke]

Also remember to read the terms and conditions of the HBP. The one that almost bit me was that the funds that will be withdrawn from the RRSP for the HBP need to have been in your RRSP account for at least 90 days. I think you have up to 60 days after closing to take advantage of the HBP. So you contribute $X to your RRSP, buy a place, close in 30 days, and then use the HBP. Of course some of the DP will have to come from other savings in the meantime.

I had a chunk of cash that I thought I could treat as an RRSP and then flip to HBP right away but otherwise, it's a great program. Tax free money to put towards a home and hopefully good equity.

[rc2002]

A couple of things to keep in mind: First if you pull out your RRSPs now you will forfeit any gains that you would've made by leaving them alone.

Second you are using after tax income to payback the amount you've withdrawn. Then you're going to get taxed on that money again when you retire and start drawing on your RRSPs.

There are a lot of factors but for myself, I found that it wasn't worth it to pull from RRSPs unless you don't have enough for a 20-25% downpayment.

[Xtrema]

The goal is get as big of a down as you can. Mortgage being amortized 20-30 years is the MOST expensive debt you can get into.

[broken_legs]

So....

Not enough people are buying houses and propping up the over heated housing market - How can we make unaffordable houses more affordable?

I know - Lets get them to use their retirement savings to buy a house - Then we'll tell them that their house is their biggest investment. Yeah good idea!


Here's a controversial idea:

Why not just buy a house that you can afford and keep your retirement funds in one piece?

[TomcoPDR]

Originally posted by broken_legs
So....

Not enough people are buying houses and propping up the over heated housing market - How can we make unaffordable houses more affordable?

I know - Lets get them to use their retirement savings to buy a house - Then we'll tell them that their house is their biggest investment. Yeah good idea!


Here's a controversial idea:

Why not just buy a house that you can afford and keep your retirement funds in one piece?

haha, interesting way of putting things, and yes you're correct.

[GQBalla]

Originally posted by broken_legs
So....

Not enough people are buying houses and propping up the over heated housing market - How can we make unaffordable houses more affordable?

I know - Lets get them to use their retirement savings to buy a house - Then we'll tell them that their house is their biggest investment. Yeah good idea!


Here's a controversial idea:

Why not just buy a house that you can afford and keep your retirement funds in one piece?

this is a very interesting statement indeed

[eblend]

I pulled my money from HBP, why the hell not? Doesn't have to be put into downpayment either, can use it to furnish the place after you buy it, or use it for anything else you feel like, just fill out the form and submit it, and you get the money to use as you please, as long as you pay it back over 15 years