As summer starts to heat up, so does the housing market in Manitoba. Let’s face it, who really wants to be out house hunting or moving boxes in five feet of snow and -40 degree weather anyways? If you’re one of the many looking to make your first foray into real estate while the weather’s hot, here are a few things you should know. . Use the Home Buyer’s Plan (HBP) wisely. If you’re unfamiliar with the program, the HBP allows first-time homebuyers to take up to $25,000 tax free from their RRSPs to help buy a home. The only stipulation is that you must pay it back over 15 years or, if you miss a repayment, include that year’s amount in your taxable income for the year. Using RRSPs and the HBP to buy your first house can really accelerate the savings process, but only if you have the discipline to hang on to your additional tax refund instead of going on that annual spring spending spree. . What they can’t account for, until you’ve picked a place, is whether they’ll lend to you based on the property you’re buying. That house is their collateral should you not be able to repay and lenders want to know it’s worth what you’re buying it for. Protect your deposit with a “Financing Condition” when making an offer on a house. If the bank comes back and tells you they won’t lend on a home, after your deposit has been paid, a Financing Condition may be your only recourse to recover it.

If you’re in the market for your first home, here are a few things you should know: The minimum down payment is not the maximum you should have. The most common question I get from first time homebuyers is “how much should I save for the down payment?” While the minimum you need is 5% of the purchase price, there are other costs you must pay for out of pocket. Expenses such as legal fees and the land transfer tax are unavoidable in Manitoba. Expect to add another 2-3% over and above your down payment to cover additional costs of home ownership. Being “pre-approved” is not the same as being “approved.” When a lender tells you that you’re pre-approved for a certain dollar amount, they are giving you a limit to shop for based on your income, credit history, and lifestyle. If you follow these guidelines, your first home buying experience will be much less stressful and much more financially sound.

Tom Johnson, Cascade Financial Group
http://www.cascadefinancialgroup.com/