Winnipeg Real Estate Market Update January 2021

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What should buyers do to prepare for the spring One of the most common questions we receive is "What is a good time to buy a home?" While the answer is "Anytime OTHER THAN the spring time", the reality remains that home buyers come out into the real estate market during the months of March - June. So if you're thinking of buying a home in 2021 or beyond, here are a few things you should be doing right now - to prepare. Here is a timetable for first time home buyers in Canada. In the U.S., check your rules regarding any possible savings plan for home buyers. • Save for your down-payment via an RRSP (1-2 yrs. before) • Get your credit report (6 months - 1 yr. before) • Make a final deposit into your RRSP (3-5 months before) • 1-2 years before buying a home Buying a home means you will need a minimum of 5% downpayment, plus about 3% for closing costs. The average house price in Winnipeg is around $300,000, so that would mean home buyers require $24,000 in cash at a minimum. Assuming you are working full-time, and/or have the ability to contribute to a Registered Retirement Savings Plan, I highly recommend that you start placing your savings into such a plan. First time home buyers will be able to retrieve that money later, without penalties. spring of next year, you can contribute your maximum RRSP amount anytime now, right until the end of February 2021. (Note: the money must be in your RRSP account for at least 90 days before you can withdraw it for a home purchase). Get a Credit Check for Home Buyers About 6 months to a year before buying a house or condo, get your credit checked. Mortgage lenders reserve the best credit rates for home buyers with the best credit ratings. Why get it checked this far ahead of trying to buy a home? Because if there are any credit blemishes on your record, you will want to have enough time to repair it. Credit blemishes could include: • Liens or loans • Over extended credit cards • Unpaid utility bills • Unpaid parking tickets (yes!) Even if you run out and fix these items right away, it usually takes a couple of months to reflect the improvements on your credit check. So fix them now, before you apply for a mortgage. Not just any credit check will do, however. Mike Schroeder of Mortgage Architects tells us that a Home Loan Credit Check is what's needed. For that, contact your mortgage lender directly, or reach out to Mike at Mortgage Architects. If you're planning to buy a home in the
market of 2021? Make one last deposit into an RRSP (Canada) I f y o u s t i l l h a v e r o o m i n y o u r contribution limits, go ahead an make another deposit at least 90 days before you go home shopping. You'll be able to take that money out and use it as a down payment, and STILL receive the tax refund as well. This is actually a neat little trick for anyone looking to buy their first home. Check this out: You have $10,000 saved for a down payment. On Jan. 2nd, you deposit this into your RRSP (assuming you still have the contribution room for the previous year). You file your income tax return, claiming a $10,000 RRSP contribution, which will get you a refund. The size of the refund depends on your tax bracket. For this exercise, lets assume that bracket is 30%. On April 15th, you pull out the $10,000 to be used as a down payment on your first home. This is done WITHOUT penalty or loss of any kind. (Some lenders may charge an admin. fee? so check with them on this) End of April, our federal govt sends you a tax refund which is now $3,000 larger than normal (30% of $10,000). You can use it as part of your down payment or closing costs. For more info and to check this out, contact my friend and expert Thomas Johnson of Cascade Financial in Winnipeg.
Page 1: Tips, News & Advice For Home Buyers
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Winnipeg Real Estate Market Update January 2021

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