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Home Buyer’s Plan: Understand Your Investment

General Darick Battaglia 17 Nov

Brad and Brenda have been putting some money in their RRSPs investments for the last four years. Their last statement shows that they have $12,500 in their RRSP’s savings, and they also have $5,000 in the bank in their savings account.

They decided to buy a starter home in Winnipeg, MB for the price of $250,000. According to their investments statement, they had enough money in their bank and RRSP account to put 5% down ($12,500) PLUS closing costs of 1.5% ($3750) of $250,000. If we add down payment and closing costs together, it comes to $16,250 – this is the amount they needed to buy this starter home.

They deposited $5,000 with an offer; their offer got accepted since their RRSPs investment statement shows another $12,500. They filled out the forms to withdraw all the investment money for the down payment. Once the money from their RRSP investment was transferred into their bank account, it had a $2,100 shortfall. Now Brad and Brenda has $14,150, but they need $16,250 to buy this home. Some funds do better than other funds – it totally depends on an individual portfolio.

Brad and Brenda must have knowledge of the actual amount in their RRSP investments instead of depending on investment statements.

Their meeting with a mortgage professional from Dominion Lending Centres could steer them in the right direction.

Courtesy of Gurcharan Singh, AMP – DLC Anderson Financial Team