The Problem Of Money

Ugh. Ok, things are moving nice and quickly, in a way I guess. The house inspection is going to happen this afternoon, and I met with the mortgage broker last night. My current stress out is getting money out of somewhere (a stone maybe?) to to make the 10% down instead of 5%, so I can get an interest rate of 3% instead of 5%. If I can’t, it’s not huge I guess, but it’d be nice. Even still having some extra liquid cash to buy things like a new fridge, flooring, and so on.

My calls to the two banks have encountered two similarities…

  • “where are you getting your mortgage” / “well we can match any rate you get” / “<whine><whine>”. Apparently being a loyal customer for the last 25 years but deciding to go with someone else for my mortgage really pisses people off.
  • “your RRSPs are locked in and you have to pay a fee to withdraw them early”
  • “to give you a print out of your account statement will cost $35 because you have a non-statement account” (I don’t have monthly statements sent to me… this was the one that blew my mind.

And they talk about the “big banks” being cold and impersonal! Might be time to take my eggs out of many baskets and put them all in one and just never deal with anyone different ever again.

I am considering either just going with the 5% down (which I can scrape up somewhere) or taking a short term loan out to cover the amount up to 10%. Though the fees to taking money out of my RRSP early are still less than what I’d pay in interest on the loan ($200-300). Of course it all has to be done RIGHT NOW as well. Yay.

Mucho thanks to all who replied to my last post with congrats encouragement and advice by the way.

UPDATE: Apparently people are stupid. I guess my Mutual Funds, of which I have many thanks to a double-dipping incident a couple of years back (too lazy to find link to rant), don’t come up as RRSP. The RRSPs I do have are locked in, but the mutal funds I have aren’t. So I have an appointment to see someone about getting those dealt with this afternoon. Huge thanks out to my man Gary M over at Envisions Young St. branch in Chilliwack for helping me out.

10 Comments on “The Problem Of Money”

  1. Darren – yes, but (according to these people anyay) if you have an RRSP that’s locked in for X years, you are breaking the contract to leave it in for X years and therefor either can’t take it out or pay a fee.
    However, see update….

  2. Great news on the update Arc. I was just about to suggest turning your spam filter off for a few minutes and using one of those great mortgage deals they come through all the time. 😉

  3. There’s no information one way or the other on Revenue Canada’s site… but I’d talk with one of the higher ups at the credit union if you can.

  4. My bad… I just caught this line:
    Locked-in RRSPs – In most cases, you will not be able to withdraw funds from a locked-in RRSP. We do not regulate or establish whether or not funds are locked in. Locked-in refers to the restrictions and limitations that are imposed by the Pension Benefit Act for each province and territory. The locked-in RRSP is designed to preserve pension assets for your retirement. Money put into your locked-in RRSP usually is the transfer value of pension benefits you have built up in your former employer’s pension plan, which you asked to be moved when you terminate employment or plan membership. If you are unsure if your RRSPs are locked in, contact your issuer.

  5. Fred – or, he could just click on one of the
    Google ads… 😉
    Even better, He’d get some money for that click as well.

  6. You might want to talk to an accountant, could save you lots of money. At least in the ‘States, you get a penalty for taking out from an IRA early (the equivalent of an RRSP), but the savings from taxes more than offsets this, and the difference between 3% and 5% will make a HUGE difference in house payments, etc.
    In other words, it sounds like you need a PROFESSIONAL opinion who can crunch the numbers for you.

  7. You can get money from your RRSPs through the Home Purchase Program. There shouldn’t be a penalty for this, because you are technically not withdrawing money from the RRSP (the amount payed back to the RRSP lowers the amount you have available for tax deduction). This page has more details:
    Getting a loan for the downpayment is going to make your mortgage company VERY NERVOUS. Getting it out your RRSPs (which is perfectly acceptable under the HPP), is better. Keep in mind that you have to repay 1/15 of the amount you withdraw every year to avoid a tax penalty.
    My suggestion is to do whatever you have to (short of a loan) to get the 10% down. It will lower you r monthly payments quite a bit, since your principal amount will be smaller.