Canadian Housing Market leading the way for economy to rebound

Buying a home is one of the most important and exciting steps in your life…. found the home you want now you need a mortgage. Deal with people who can offer you and your family the best options.  Devin Cristo and Wes Will of Your Mortgage Now are Saskatoon Mortgage Experts. We have many years of experience helping individuals and families by offering mortgages from a variety of lenders. Your Mortgage Now are Trusted Saskatoon Mortgage Brokers. In our latest article, we share the latest news and forecasts about the Canadian housing market.

Canadian Housing Market 2018 forecast

The Bank of Canada (BoC) announced at the end of April 2018, that after a weak economic performance in the first quarter of 2018, it is predicting a rebound for the economy in the coming months.

“GDP growth in the first quarter was weaker than the Bank had expected but should rebound in the second quarter, resulting in 2 percent average growth in the first half of 2018,” reads the BoC announcement.

The weak first quarter performance — which saw GDP growth fall sharply from 2.5 to 1.3 percent — has been widely attributed to a flagging housing market, as home sales dropped after the introduction of a new mortgage stress test on January 1.

“Slower economic growth in the first quarter primarily reflects weakness in two areas,” reads the Bank’s announcement. “Housing markets responded to new mortgage guidelines and other policy measures by pulling forward transactions in late 2017…Some of the weakness in housing…is expected to be unwound as 2018 progresses.”

According to BMO economist Benjamin Reitzes, the central bank’s more optimistic outlook for the second quarter reflects a belief that the housing market has adjusted to the new mortgage stress test, and will soon begin to recover.

“While Q1 GDP growth was cut sharply to 1.3 per cent…Q2 was introduced at a very solid 2.5 percent, suggesting that the BoC is looking for some stability in housing over the coming months, at a minimum,” he writes in a recent note.

Reitzes also agrees that a warmer housing market is likely this spring. “We’re looking for a similar rebound in Q2, so can’t argue with that,” he writes.”

It’s a sentiment echoed by Scotiabank economist Marc Desormeaux, who believes that the housing market is on its way to bottoming out, and will see a surge in activity later in the year.

“March’s uptick in home purchases [of 1.3 per cent] implies some bottoming out of sales activity, he writes, in a recent note. “Following the first quarter contraction, we anticipate a modest but broad-based recovery in sales activity [in the second quarter.]”

 

Deal with the Saskatoon Mortgage broker experts you can trust at Your Mortgage Now and be sure that you have looked at all of the options, and that you have the best mortgage products and the best mortgage rates to suit your needs.

They want this process to be as easy as possible for you. Run some numbers through their online calculators, and look through the resources that they offer on their website.

No time for an appointment?  No problem! You can apply online with Your Mortgage Now!

 

Original article: Buzzhomes- Sarah Niedoba

PST added onto CMHC Premiums as of August 2017

If you were on the fence about buying a house, do it before PST added onto CMHC!

 

Buying a home is one of the most important and exciting steps in your life…. found the home you want now you need a mortgage. Deal with people who can offer you and your family the best options.  Devin Cristo and Wes Will of Your Mortgage Now are Trusted Saskatoon Mortgage Experts and they have many years of experience helping individuals and families in Saskatoon and area by offering mortgages from a variety of lenders . Their latest article is about upcoming changes in August when PST added onto CMHC Premiums

PST added on CMHC Premiums

PST added onto Mortgage Insurance Premiums as of August 1st 2017

CMHC has recently advised us that there will be a 6% PST charge on all Mortgage Default insurance premiums (CMHC/GE/Canada Guaranty) as of August 2017.
CMHC will be required to collect 6% provincial sales tax (PST) on premiums and surcharges for full or partial loan advances made on or after August 1, 2017.
The Saskatchewan PST will be payable on premiums paid for all mortgage loan insurance transactions. The provincial sales tax cannot be added to the loan amount.

What does this mean for YOUR Mortgage?

If your possession date is on or after August 1/2017 there will be a 6% PST charge on your CMHC premium
An Example:
Purchase $450,000.00
Minimum 5% downpayment $22,500.00
=$427,500.00
+CMHC premium $17,100.00 (4% surcharge/minimum 5% down)
=Total mortgage $444,600.00
*TOTAL PST required at lawyers office payable=$1026.00 (6% of the CMHC premium)
This PST cannot be financed as part of the mortgage and is only applicable on insured mortgages (CMHC/GE/Canada Guaranty)

Looking to purchase a home soon?

Having the mortgage approval in place and taking possession before AUGUST 1st 2017 will save you this additional PST cost.

Deal with the Saskatoon mortgage brokers you can trust at Your Mortgage Now and be sure that you have looked at all of the options, and that you have the best mortgage products and the best mortgage rates to suit your needs.

 

 

Dealing with Mortgage Payment Difficulties & Fort McMurray fire disaster

Devin Cristo and Wes Will are Trusted Saskatoon Licensed Mortgage Associates with Your Mortgage Link, Brokerage License #315794. Your Mortgage Link is a Saskatchewan based brokerage operation, with offices in Saskatoon and Regina, competing in the wholesale mortgage market Canada wide. Our goal is to offer clients a broad range of mortgage products, and create competition between many of Canada’s top lenders.

Mortgage Payment Difficulties

When unforeseen financial circumstances impact your ability to make regular mortgage payments, or disaster strikes, it’s important for you to take quick action. With early intervention, cooperation, and a well executed plan, you can work together with your mortgage professional to find a solution to your financial difficulties.

 

 

Dealing with Mortgage Payment Difficulties

What Can We Do to Help?

If you find yourself facing financial difficulties, as a result of job loss, family income reduction, or for other reasons, it can be an overwhelming experience leaving you feeling uncomfortable and unsure of what to do. By following these three simple steps, you can make a big difference in resolving your financial difficulties.

1. Talk to your mortgage professional

  • To increase the chance of successfully managing your financial situation through early intervention, call your mortgage professional at the first sign of financial difficulty;
  • Ask the mortgage professional about information on the options available for managing your financial situation; and
  • Keep the mortgage professional informed as circumstances evolve.

2. Clarify the financial picture

In order to help your mortgage professional fully understand your financial situation, before meeting with them, prepare a detailed list of financial obligations including any credit cards, loans, household bills with the amounts owing and their due dates. Be sure to include information about your current income, savings accounts, investments, and any other assets.

3. Stay informed

The more information you have at your disposal on managing your finances, the easier it will be to make the right decisions.

Take Charge of Your Debts is an online tool from the Government of Canada that is designed to help borrowers like you understand debt problems, and includes information on making a budget, budget counselling, collection agencies, credit, and credit repair. To view this tool, log on to www.ic.gc.ca (Industry Canada) and search for “Take Charge of Your Debts”.

How Can Your Mortgage Now and CMHC Help?

Your mortgage professional wants to establish and maintain a positive relationship with you over the long term, and is fully trained and equipped with the tools to help you deal with the temporary financial setbacks that you may be facing.

For mortgages insured by Canada Mortgage and Housing Corporation (CMHC), CMHC provides mortgage professionals with tools and the flexibility to make timely decisions when working with you to find a solution to your unique financial situation. These tools include:

  • Converting a variable interest rate mortgage to a fixed interest rate mortgage in order to protect you from a sudden interest rate increase, should one occur.
  • Offering a temporary short-term payment deferral. Your mortgage professional may be prepared to offer greater payment flexibilities, particularly if previous lump sum prepayments have been made, or if you have previously chosen an accelerated payment schedule.
  • Extending the original repayment period (amortization) in order to lower your monthly mortgage payments.
  • Adding any missed payments (arrears) to the mortgage balance and spreading them over the remaining mortgage repayment period.
  • Offering a special payment arrangement unique to your particular financial situation.

CMHC is also willing to consider other alternatives proposed by the mortgage professional to resolve or avoid mortgage payment default. In every case, the options available will depend upon your individual financial circumstances.

 

 CMHC Tools to Support Canadians Affected by Fires in Fort McMurray and Area

Mortgage Payment Difficulties

CMHC joins Canadians in expressing our concern for the people of Fort McMurray and the surrounding area that are dealing with devastating forest fires.

As residents continue to deal with the effects, CMHC wishes to remind mortgage professionals that we can help you assist homeowners that may be affected by these unfortunate events. and their impending Mortgage Payment Difficulties.

For borrowers with CMHC-insured mortgage loans that are affected by the fires and who may require special arrangements to meet their mortgage payment obligations, CMHC offers Approved Lenders a series of default management tools including:

o        Deferral of payment
o        Re-amortization of the loan, to result in lower payments
o        Capitalization of outstanding interest arrears and other eligible expenses
o        Special payment arrangements
o        A combination of the above

Approved Lenders have the flexibility to make these special arrangements quickly and without CMHC approval provided that they retain a documented analysis of the borrower’s financial situation on file. Approved Lenders can refer to the CMHC Homeowner Default Management Guide for complete details on CMHC’s default management program. Please find attached a flyer providing a summary of these arrangements.

Approved Lenders are reminded that properties must be adequately protected by standard insured perils and that any damage exceeding $5,000 should be reported to the CMHC Claim Payment Centre.

CMHC recognizes that homeowners affected by the fires may experience some financial hardship due to income shortages resulting from temporary evacuations or due to the need to rebuild or repair their homes. CMHC encourages homeowners with CMHC-insured mortgages to contact their financial institution at the first signs of financial difficulty to discuss their specific situation. 

To help you share information with any of your clients that may be affected, please also find attached CMHC’s “Dealing with Mortgage Payment Difficulties” factsheet. 

CMHC’s Default Management Tool Selector can also help lenders to determine what CMHC default management tools are most appropriate given the borrower’s circumstances. CMHC also offers comprehensive training to Approved Lenders covering CMHC’s default management tools and more. If you are interested in obtaining training, please contact your CMHC Account Manager, Client Relations.

CMHC’s Default Management and Claim Specialists are also available to assist you at any time, including before a default occurs and during early stages of payment delinquency. The Specialists have the expertise to help you manage unusual or complex default situations. Contact the Claim Payment Centre, Monday to Friday at 1-866-358-9999 or by email at cpc@cmhc.ca, to speak with a Specialist.
You can work with confidence, knowing that you are supported by an experienced and informed mortgage loan insurance provider in the Canadian housing market.

Do not hesitate to contact me if you have any questions or require assistance.

CMHC is Canada’s national housing agency. For over 65 years CMHC has shared a wealth of knowledge and housing expertise to help create an informed and reassured homeownership experience for Canadians.

Sarah’s Your Mortgage Now testimonial

Devin Cristo and Wes Will are Trusted Saskatoon Licensed Mortgage Associates with Your Mortgage Link, Brokerage License #315794. Your Mortgage Link is a Saskatchewan based brokerage operation, with offices in Saskatoon and Regina, competing in the wholesale mortgage market Canada wide. Our goal is to offer clients a broad range of mortgage products, and create competition between many of Canada’s top lenders. More than anything we want to make your mortgage experience as stress free and easy as possible. We are never happier than when are clients share that we achieved that … as in the testimonial below.

testimonial

Your Mortgage Now Testimonial from Sarah

“Going through a divorce is a stressful, emotionally stunning time. Thinking about all the ins and outs of daily life not to mention the big picture items such as mortgage, bills, children’s care and expenses that accumulate with legal fees is overwhelming and pressure-filled.  It is not insurmountable however when you have the right people in your corner, working with you, being patient with you, and providing you as much guidance as they can as you navigate through the waters.  Devin and his team have gone above and beyond for someone like me.  I felt respected and listened to at all times, and my concerns were real.  I never felt rushed and I was encouraged to ask questions when I needed more explanation.  I felt cared about and for.  When the time came for some excitement and I wanted to remain optimistically reserved I was granted the time to smile as they also felt excited for me.  Devin is a kind, patient, and heartfelt businessman.  I am grateful for the support through what I know to be one the hardest things to go through in this lifetime.  I have a new mortgage and my smiles exist and I feel safe and secure for myself and my children.  Hard work is ahead of me but with this kind of professional care I know I am not alone and that has made the world of difference.  For all people going through divorce I recommend this team from the bottom of my heart.  ” 

CMHC Calls Out Real Estate Markets for Signs of Overvaluation

Devin Cristo and Wes Will are Trusted Saskatoon Licensed Mortgage Associates with Your Mortgage Link, Brokerage License #315794. Your Mortgage Link is a Saskatchewan based brokerage operation, with offices in Saskatoon and Regina, competing in the wholesale mortgage market Canada wide. Our goal is to offer clients a broad range of mortgage products, and create competition between many of Canada’s top lenders.Real Estate Overvaluation

CMHC

The Crown Corporation, which monitors the housing market in the country, is coming around to the view that there may be some overvaluation and overbuilding in some Canadian cities.

Canada Mortgage and Housing Corp. said Wednesday that overvaluation cReal Estate Overvaluationan be “detected” in nine of the 15 cities it monitors with overbuilding recorded in seven.

“While we see weak evidence of problematic conditions for Canada, we do detect moderate evidence of overvaluation. This means that house prices are higher than levels that can be supported by fundamental factors such as income growth and population growth,” said Bob Dugan, chief economist with CMHC.

CMHC’s valuation is part of its quarterly Housing Market Assessment, something the Crown Corporation calls an early warning system, alerting Canadians to areas of concern developing in our housing markets so that they may take action in a way that promotes market stability.

Real Estate OvervaluationSince its last assessment, CMHC added Vancouver, Hamilton, and Saskatoon to cities where housing prices may be overvalued. The averaged detached home in metro Vancouver is almost $1.8 million today and prices are rising about 23 per cent year over year in Canada’s most expensive city for home ownership.

The Crown Corporation says there “strong evidence of problematic conditions” in the overall market for Toronto, Calgary, Saskatoon and Regina. Toronto’s issues are price acceleration and overvaluation. In Calgary, Saskatoon and Regina, the issue is a combination of overvaluation and overbuilding.

CMHC defines problematic conditions as imbalances in the housing market that occur when overbuilding, overvaluation, overheating and price acceleration, or combinations of those issues exceed historical norms.

Your Mortgage Now Saskatoon discloses Mortgage Costs

Devin Cristo and Wes Will are Trusted Saskatoon Licensed Mortgage Associates with Your Mortgage Link, Brokerage License #315794. Your Mortgage Link is a Saskatchewan based brokerage operation, with offices in Saskatoon and Regina, competing in the wholesale mortgage market Canada wide. Our goal is to offer clients a broad range of mortgage products, and create competition between many of Canada’s top lenders.

MORTGAGE COSTS

mortgage costs
Over and above your down payment, there are always last-minute costs such as taxes, legal fees, appraisal fees, moving expenses, and house insurance to pay before you are finally a new home owner.

These are known as “closing costs”, and there are some that you simply cannot avoid or lessen, as they are legally required and often fixed at a particular rate or charge. The time to budget for those “end” expenses is now. You must be prepared to pay most, and perhaps all, of the following costs.

Property Purchase Transfer Tax

Some Provincial Governments impose a Property Purchase Transfer Tax (PPTT) which must be paid when a property is legally transferred to a new owner. Each Province has there own formula.

Taxes

If you are purchasing a new home, you may be subject to GST/HST on the purchase price. Most Provinces will reduce the GST/HST if the purchase price is under a certain threshold. Check your Provincial Government Web Page for details.

Legal Fees

The transfer of property ownership fro the seller to the buyer must be recorded in the Land Title Office. Only a lawyer or notary can act on your behalf during the completion of your purchase. Legal fees for this service typically include a registration fee, disbursements, and a fee to prepare and register the mortgage documents.

Property Tax Adjustment

Of the current owners have already paid the full year’s property taxers to the municipality, you will have to reimburse them for your share of the year’s taxes.

home-inspection

Home Inspection Fee

A property inspection includes a check of all the major components of a building – roof, foundation, insulation, plumbing, heating, and electrical systems are all properly tested and examined. Not only do inspectors catch things you may have missed, but they also provide a detailed, written inspection report. CIBC will pay up to $500 for home inspections in most places in Saskatchewan.

Appraisal Fee

Lending institutions require an appraisal of the property before giving you your mortgage funds; it will be your responsibility to pay the appraiser’s fee.

Title Insurance

The lending institutions may also require Title Insurance (which has now replaced a Survey Certificate in most cases) to formally establish the boundaries of the property and to ensure that all buildings are within those boundaries.

Mortgage Default Insurance

A high ratio mortgage allows borrowing more than 80% of the purchase price of the new home. In most cases, the premium is added to the mortgage amount, however if you can pay the premium upfront, do so now – it could save you even more later.

Life and Disability Insurance

As you take on any new debt, you should always consider your insurance protection needs, especially if you have a young family. You could purchase protection from your lender, however in most cases you would be better off to speak to an insurance agent/broker.

Fire Insurance

The mortgage lender will insist that you purchase an insurance policy which guarantees that, in the event of fire, the lender will receive the balance owing on the mortgage before you receive any insurance proceeds.

APPLY ONLINE NOW or call us today!

Wes Will Mortgage Broker Devin Cristo Mortgage Broker

Welcome to our new Your Mortgage Now Saskatoon website

A NEW WEBSITE FOR YOUR MORTGAGE NOW!

Devin, Wes and the Your Mortgage now Saskatoon mortgage team are thrilled to launch our new website to the World.

The Your Mortgage Now website

We wanted to create a new website that is consumer focused, a resource and one stop shop for all your mortgage needs.

Please check out the following new and improved features.

  • APPLY NOW  – No need to wait till office hours , apply for your mortgage from the comfort of your sofa!
  • MORTGAGE NEWS   – Our new simple to search resource library means all the info you need to do your research is right there and easy to find!
  • MORTGAGE RESOURCES  – A library of local mortgage and real estate professionals and a list of our lenders. All in one place for your convenience!
  • MORTGAGE CALCULATOR – On our home page – find out approximately what your down payment will be with our simple and helpful mortgage calculator.

 

Wes Will Mortgage Broker Devin Cristo Mortgage Broker Tanya Shar Mortgage associate

 

Please let us know how you like the new look, it was designed and built for us by Trusted Marketing Services and we think it reflects our personality and is a great resource for Saskatoon and area!

Your Mortgage Now website

 

 

Easy Habits to Help Save for Your First Home

FIRST TIME HOMEBUYERS

first time home buyer

At YourMortgageNow.ca, we are always ready to answer any questions you may have about buying your first home in Saskatoon and area. But for some people, saving to buy their first home may seem daunting and they don’t quite know where to start. Here are some great money-saving tips to get you started:

  1. Set a long-term goal: “I want to buy a home by the age of 30” or “I want to buy a home within five years of graduation from college”.
  2. Determine how much you can afford: Be realistic about where you want to live and what type of home you will likely be able to afford. Consulting a financial advisor or mortgage professional early on will put you on the right path to fulfilling your goal.
  3. Create a budget: Keep track of all the money that comes in and all the money that goes out. Balancing expenses against income will help you determine what, if any, adjustments you need to make to your spending habits in order to build savings.
  4. Pay yourself first: Open a separate savings account and deposit a set amount of money every month through an automatic withdrawal from your paycheque or other bank account.
  5. Live on cash: Every pay day give yourself an allowance in cash to get you through to the next pay day. If you don’t have cash handy you might think twice before buying something you don’t really need.
  6. Build your savings account: Live off your day-to-day earnings and make the most of every unexpected inflow of cash. If you work overtime or receive a bonus, put that money right into your savings account.
  7. Party at home: Going out for dinner, clubbing or a movie can really add up on your monthly expenses and kill your budget. Host movie nights or potluck dinners at home and see your savings grow.
  8. Earn extra income: Sell unused items online through sites such as eBay, Craigslist or Kijiji; take on a second job; work part-time and summers if you’re a student.
  9. Open an RRSP account early on: The Federal government’s Home Buyer’s Plan allows you to withdraw up to $20,000 from a Registered Retirement Savings Plans (RRSP) for a down payment on a first home. Consult with a financial advisor or mortgage professional to grow you investments wisely.
  10. Do your homework: Before making any big investment or purchase, do some research. Avoid spending on impulse or emotion. If it sounds too good to be true, chances are it is.

Happy Saving!

Wes Will Mortgage Broker Devin Cristo Mortgage Broker

Devin Cristo & Wes Will are Trusted Saskatoon Mortgage Associates of YourMortgageNow.ca

Is Your Mortgage Up For Renewal?

 

MORTGAGE UP FOR RENEWAL

The biggest monthly expense for most Canadians is their mortgage payment.

Yet according to an Angus Reid survey, almost 27 per cent of households automatically renew their mortgages when the term is up instead of trying to find a better deal.

Mortgage renewal

If your mortgage is up for renewal within the next 6 months you may want to start thinking about what you’re going to do when your mortgage term ends. While you could renew with your current lender, you may be missing out on potential mortgage interest savings. It’s most often in your best interest to see what else is available for you before you sign on the dotted line of any mortgage commitment. This week, we want to highlight the mortgage options you have at renewal time so you can make an educated decision on how to proceed into the next term of your mortgage.

Renew your mortgage with same lender

If you don’t want to make any changes to your current mortgage amount or amortization, a simple mortgage renewal could be the solution for you. Your existing mortgage lender will usually send you an offer to renew near the end of your mortgage term or maybe sooner, depending on your lender. This document will contain the different mortgage term rate offerings for you to choose from. The benefit of renewing with your existing lender is, minimal paperwork is required as most often you are not required to re-qualify for the mortgage and there’s usually no costs involved unless your lender is charging you a renewal fee. This is ideal if you just want to sign on the dotted line, though the downside is you may not have initially been offered the best rate available. Often the rates are negotiable and you need to be aware you don’t get what you don’t ask for, however, before having the rate talk with your lender do some research first to determine what exactly the “best rates” are for your current financial position.

Renegotiate your mortgage with a different lender

If you’re okay with your existing mortgage amount though looking at making changes to the interest rate, or other terms your contract does not offer, you may want to look at the possibility of renegotiating your mortgage with a different lender. If you’re going to look at this option, be prepared to provide updated mortgage application details as well as supporting documentation to your new mortgage lender. As you don’t have a mortgage repayment history with this new lender they will want to re-qualify you for the mortgage which will also involve ordering your credit report. Usually a mortgage “switch” doesn’t involve any costs charged by the new lender as they will cover them, though there may be some small administration costs of $200-$300 charged by the lender you are leaving.

Refinance your mortgage

A refinance is perfect for you if you want to access your home equity at renewal time. Refinancing your mortgage allows you to restructure your mortgage amount, term, interest rate and amortization. If you have sufficient equity available this can allow you to pay off debt, invest, renovate, and more. There are some costs related to refinancing your mortgage which may include appraisal and legal fees, though they usually aren’t as high as what you paid when you originally purchased the home. Some lenders will also offer to pick up some of the costs to their refinance customers or offer some small cash back amounts to help reduce any out of pocket costs that need to be paid. You can also discuss other options including paying some of those costs from your refinance funds at closing time.

The next step is deciding on which of the 3 ways you want to access your equity at renewal time;

  1. Restructure your first mortgage to accommodate the extra funds you want out of your home.
  2. A second mortgage will allow you to leave your first mortgage details the same, but access equity by obtaining a 2nd mortgage behind your 1st one. Be careful though, as 2nd mortgages may come with higher rates and possibly fees.
  3. Or, if you qualify, a home equity line of credit could be the solution you’re looking for. It can be registered behind your first mortgage and offers a variable interest rate, an open term and interest only payments.

A lot can change during the term of your mortgage including income, assets, debts, and financial profile, among other things. It’s never a bad idea to give your mortgage a check-up at renewal time to ensure it aligns with the financial goals you are trying to achieve. Don’t be afraid to explore how you can make your mortgage work to your benefit by partnering with experienced mortgage professionals at YourMortgageNow.ca. Devin and Wes are Trusted Saskatoon‘s Mortgage Associates who specialize on the perfect financing solution for your unique financial situation.

Wes Will Mortgage Broker Devin Cristo Mortgage Broker

What to do with your TFSA?

 

What to do with your TFSA

For you savvy investors out there — or those planning on investing this year– now is a great time to think about your TFSA contribution for 2015. As of January 1, eligible Canadians (residents over 18) can contribute an additional $5,500 to their TFSAs. That brings the total contribution room to $36,500.

The Tax Free Savings Account (TFSA) is a fantastic way to save to achieve your financial goals in the future. However, only 19% of Canadians are aware of TFSA contribution limits, and only 11% of Canadians could correctly identify the investment types eligible to be held in a TFSA.

A Simple Introduction To Tax Free Savings Accounts
The TFSA was created in 2009 as another investment vehicle to help Canadians save. The money you deposit into the account allows you to earn interest, dividends, and capital gains tax free! That’s huge because taxes can quickly eat up your hard earned investment returns.

Let’s highlight a few key rules…

  • Unlike a RRSP, TFSA contributions are not tax-deductible but the contributions and the investment earnings are exempt from tax upon withdrawal.
  • Do not over contribute! You are liable to a tax of 1% on your highest excess TFSA amount in that month. That cost can quickly get expensive, so be prudent when depositing. You can have more than one TFSA account at two different financial institutions, but be sure to not go over the total limit.
  • If you withdraw money, you must wait until the following calendar year to recontribute.
  • You never lose your contribution room if you miss a year. So for those of you who haven’t opened one yet and have been living in Canada, start making those deposits!
  • Remember to declare a beneficiary to avoid estate issues at death.

What is the difference between a TFSA and RRSP?

  • An RRSP is primarily intended for retirement savings. Tax assistance provided by a TFSA complements that provided through RRSPs.
  • RRSP contributions are tax-deductible while RRSP withdrawals are added to income and taxed at regular rates.
  • Unlike an RRSP, which must be converted to a retirement income vehicle at age 71, a TFSA does not have any minimum withdrawal requirement.
  • There is no TFSA spousal plan. Individuals can provide funds to their spouse or common-law partner to invest in their TFSA, up to the spouse’s or common-law partner’s available room, and the income earned on the contributed amount is generally not attributed back to the spouse or partner who provided the funds.

So, what can you do with your TFSA?

  • Use it to trade
    If you keep your TFSA in a high interest savings account (HISA), your returns will be anemic. To energize your TFSA, you need a more pro-active strategy – like trading.
  • Use it as a retirement fund
    We’re not saying to pull everything out of your RRSP—it’s still a great way to save for retirement. But TFSAs are becoming serious competition. They are especially important once you turn 71 when mandatory RRIF withdrawals kick in. If you’re over the $71,000 income threshold, you’ll possibly lose government income benefits.
    Since TFSA withdrawals are not taxed, you can use them to supplement your income without adding to your taxable income numbers.
  • Use it as your emergency fund
    Say your roof caves in or your car starts making that funny noise again, you’re going to need some access to cash. TFSAs are the best umbrella for the proverbial rainy day. You can withdraw as much or as little as you need to keep your budget balanced. And in the following year, you’ll be able to put any withdrawals back in. [Remember, the money in your TFSA is as liquid as the investments you hold. If you want to withdraw, you’ll have to factor in settlement time for the cash to appear in your account.]
  • Use it to pass on wealth
    TFSA beneficiary are two words your loved ones want you to know. Straight from the CRA’s rulebook: any money passed down to a beneficiary does not need to go through your estate. That means your family won’t get dinged on probate taxes from capital gains. If you can’t remember whether you designated a beneficiary when you opened your TFSA, check your account documentation.
  • Use it as collateral
    It’s nice to see a big number at the bottom of your statement but that money can do more than look pretty. Put it to work. Your TFSA can be used as collateral when you’re trying to secure a loan, like a mortgage. Better yet, you can build up your savings for the down payment of your home. Then build it up again to make larger payments on your mortgage.

Whatever you decide to use your TFSA towards, we can direct you to our network of Financial Advisors.

Devin Cristo & Wes Will are Trusted Saskatoon Mortgage Associates of YourMortgageNow.ca