Having Difficulty Managing your Monthly Bills?

For many Canadians, it is easy to let the monthly bills get out of control and it becomes difficult to make ends meet. Making multiple payments to credit cards and other credit lenders can be overwhelming. Our mortgage brokers at Alberta Equity are qualified professionals who are trained to find the perfect solution for your unique situation, so why not make things much simpler with one easy payment? Here are some options to consider:

• Refinance your existing mortgage and use the equity in your home to pay off high interest credit cards
• Obtain a short time second mortgage for a if you are unable to refinance your existing mortgage

Open Mortgage vs. Closed Mortgage

OPEN MORTGAGE
An "open mortgage" can be paid back in full at any time prior to maturity, without penalty. You will find most variable rate mortgages with deep discounts are closed for a pre-determined time. After this time frame the mortgage can become an open mortgage. A qualified mortgage agent can clarify the differences for you.

CLOSED MORTGAGE
A "closed mortgage" can not be terminated or paid out before the end of the term without penalty. A "closed mortgage" provides payment stability but penalizes a mortgager who wishes to terminate the mortgage before the end of the term. Terms can be for six months, one to five years, or for seven, ten, fifteen, eighteen and twenty-five years, with the five year term being the most common. Interest rates generally rise with the length of the mortgage term. Most fixed rate mortgages are closed.

Can I use Funds from my RRSPs as a Down Payment without Tax Penalty?

The answer is yes. Through the Home Buyers' Plan (HBP), Revenue Canada permits you to use up to $25,000 of your RRSP funds as a source of down payment towards buying or building a new qualifying home. Revenue Canada will not view your eligible withdrawal amount as income therefore, that amount will not be taxed. However, there is a catch. The amount withdrawn from your RRSP must be repaid into your RRSP within a 15 year period. If you fail to make the repayment by the specified deadline, the amount that was withdrawn will then be counted as income for that year and you will be taxed.

If you use your RRSPs within the specified guidelines of the Home Buyers' Plan, you will see both immediate and long term benefits. For example, you are immediately able to increase your down payment amount which in turn decreases your principal amount owing. By owing less on the principal, you will gain substantial savings on interest alone over your mortgage term.

Is Buying a Home a Good Investment?

Many first-time home buyers are inexperienced when it comes to investing and even wonder if buying a home is a good investment? Don't take our word for it! You can ask other home owners as they tend to agree that yes buying a home is a solid investment.

Investing in real estate gives a home owner both financial leverage and possible monetary gains upon selling the residence. Because you are not required to have the full purchase price you can borrow the money to finance the purchase and when if you sell, any money made on the residence above the purchase price is tax free and yours to enjoy.