Hey guys, we are a first time home buyer and looking to buy a townhouse for the price of 620k, we have found one. We are going for pre approval meeting with TD bank. We will be using the down payment from our RRSP and will apply for withdrawal. Last year we took a loan for RRSP. Our completion date will be in mid June, and by that time loan will be around 5 k left. Do banks ask for pay that loan first before we withdraw RRSP, or loan can proceed!!! We will keep on making payments of course!!! Anyone has any idea, please help. My husband is self employed and his income from last two years is average 110k per year. And I have 45k salary and I am on maternity leave. Will be back to work in July. Will we be approved??
First time home buyer- RRSP withdrawal.
- Thread starter Ishar
- Start date
I am not sure about the loan payment amounts you are doing for RRSP. Any mortgage advisor would suggest you to close the 5K balance, because your payments would bring your GDS/TDS scores up when the bank does the stress test. And the bank does the stress test in the back end on 4.79% interest rate (not the one which your mortgage agent gives which these days is 1.xx%). You have a decent family income to be approved, with a controlled debt and liabilities giving a lower GDS/TDS. Maintain the average you just spoke of in the NoAs as well.
If you have not already asked TD to make a hard check on your account, I would highly recommend have a conversation with a mortgage agent (not the bank mortgage advisors), you will get better options/ideas and understand the nuances. Later you could take a call on which bank and what rates. Since your closing is in June, you have time, they usually hold rates for 90/120 days. Hope you get a good deal.
If you have not already asked TD to make a hard check on your account, I would highly recommend have a conversation with a mortgage agent (not the bank mortgage advisors), you will get better options/ideas and understand the nuances. Later you could take a call on which bank and what rates. Since your closing is in June, you have time, they usually hold rates for 90/120 days. Hope you get a good deal.
Besides, I am assuming you are aware of the 90 day minimum lock-in period for your RRSP amount, in case you want to withdraw for your first home purchase. So, even if you keep making payments, you have to finish it before 3 months to closing. Hope it helps.
For the 90 day thing, our funds are in RRSP since last year. So that should be okay right?? Is that what it means?
Yes! A maximum of 35k for your husaband and if you invested in spousal rrsp then another 35k in your name can be withdrawed under HBP. In my example the toral of 70k needs to be in your rrsp account for atleast 90 days before withdrawal.
General calculation of maximum loan amount for preapproval is 4x your family income which in your case is well over 600k. Not sure what are the requirements for self-employed income proof but if you both had chequing accounts with regular deposits for atleast 2 years then there are very good chances of pre approval for 600k.
Good luck.
