# 118 patriotzed:

Thanks for the answer.

What concerned me was that the mortgage expert was specifically mentioning the use of RRSP from party "X" ie parent to assist party "Y " ie own children in a home purchase. If the rules are pretty tight ,as you say, thats good.

NO -LYMPICS: my understanding is you take a tax hit if you simply cash it out, but if you use the funds to act as a “bank” for other investments, (ie such as lending to family and being paid back on negotiated terms ) you are not so impacted. RRSP withdrawls are fully taxable (like employment income or interest income) unless done under an approved plan such as the homebuyers plan (which is only for taking money from YOUR RRSP to buy YOUR first house) and – I think – a similar plan for people going back to school. It is possible to use funds in your RRSP to make a mortgage loan to yourself or anyone else, but the bank must act as a trustee and set the same terms as for any other mortgage loan (and that includes… Read more »

@ #115….DD…patience my friend, it'll collapse as it has everywhere else…we were late arriving at this drunk fest and we'll be late leaving!

SO…..

Gordo will help provide approx. 300 " Volunteers " for 2010 games in the guise of paid BC civil servants taking time off with pay from their normal duties.

Pathetic, isn't it?

VANOC must be getting desperate….are these games shaping up to be a disaster?

Campbell should take off his blinkers and get out of his bunker ie head out of his ass (bumker?)

112 NO-LYMPICS Exactly – they are scrapping the barrel to keep the bubble going. I agree with your skepticism, but to be frank, I am now numb to all the tricks the government, the banks, developers, mortgage brokers and realtors have pulled to keep this bubble going. First, you no longer need 20% down; then you can count potential rental income as actual income when seeking a mortgage; then 30, 35 year amortizations; then zero down, 40 year amortizations; then "self-employed" becomes a category where you can put down any income, and it stands; then family and friend mortgages (invest with your friends because you cannot afford a condo on your own); then reverse mortgage commercials where grandparents are told how to give some of their equity to their grandchildren; then the $75 billion mortgage swap between the feds and… Read more »

Mish has coined an interesting term: pent up demand to sell. We've all heard about pent up demand to buy, but maybe if prices start to stabilize, we will get to see if there is pent up demand to sell (i.e. people who wanted to sell but waited because they felt they could get better prices by doing do).

DD

It wasn't a realtor..it was a mortgage broker.

Excuse my skepticism(aka it's on a parabolic rise ! ), but when this sort of advice appears in the media, it further exposes the incestuous relationship betwen the media and RE pimps . They are dredging for the last of the greater fools with this co-ordinated stunt.

"…but if you use the funds to act as a “bank” for other investments, (ie such as lending to family and being paid back on negotiated terms )"

I don't think this is accurate – it would be a tax scam waiting to happen!

RE: RRSP and tax implications Does it matter if a realtor is giving advice on other financial products? They view themselves as professionals that give "investment" advice, so commenting on another financial vehicle for obtaining home ownership is just part and parcel of that "investment" advice. I remember when I was looking a few years ago, I had to tell some realtors to stuff it when they suggested co-mortgages with family and friends or seeking parental assistance via DP or co-signing. These means of acquiring property were simply taken for granted assumptions, as they could not understand why someone would want to make the biggest purchase of their "adult" life on their own (i.e. be an adult and do it on your own). As for lending practices, I don't think that the realtors's "advice" reflects a tightening of the lending… Read more »

oneangryslav:

re tax implications, my understanding is you take a tax hit if you simply cash it out, but if you use the funds to act as a "bank" for other investments, (ie such as lending to family and being paid back on negotiated terms ) you are not so impacted. I am not an expert on this , so maybe someone better informed can comment.

My main point is why is a mortgage broker giving such advice ? Isn't a mortgage broker suuposed to be the middleman between lenders (ie financial insitiutions) and borrowers? Is this a sign the banks are tightening up?

That's even more of a sign to not risk one's own money.

Oh oh ….. On Global they just showed a mortgage broker disucssing having family aka parents helping their children with mortgages. Options submitted include: —- outright gift for the downpayment —- co-signing for the mortgage —- reverse mortgage of the parents home —- parents using their RRSP's and being paid back by the children etc. I dunno…. If they can afford to help their children, great. However in a market that has all the indications of being a bubble on the brink of collpase…bad idea. I can see a lot of stress and ill will looming if this begins to happen. For that mortgae broker to go on TV and flog this idea was very UNethical…IMHO its scraping the bottom of the barrel, as its intent is far from being free advice/or informative, but simply to keep the bubble inflated… Read more »

#104 LOL excellent!

30 seconds of kool aid, followed by a 5 second Shiff beatdown

No Longer Looking:

Many thanks for posting the site!

DD and rp: Actually the woman who sold the house bought in the late 80s after expo. That is 20+ years of home ownership and NO PROFIT. Back to renting…

And the Hong Kong family who bought the condo in 1997 — I have no idea about their finances. I can only tell you what the seller of the SFH relayed to me.

Sad but true.

realpaul:

Keep in mind that HST will be applied and/or increased on many fees associated with real estate transactions, even used homes.

However, as usual, FTB can be counted on to make the dumbest moves possible. Go where they A-I-N-'T . These are the economic Darwinian types that will bid up the selling price in excess of the HST increase , out of fear of the HST.

Watch the realtors and developers between now and July 2010 keeping CanWest alive with ads to " buy now and beat the HST " .

Alright, so I just came back to Vancouver from South America last week. I took a few runs around at open houses and it seems like the real estate agents are more desperate than before. They tell me that they have offers last week, then today, when I passed by the same houses, they've got the open house sign up. I just talked to my friend who works in a bank in Toronto in commercial financing and she said things are pretty bad out there in Toronto. I was driving around during rush hour last week and the traffic seemed to have lightened up a bit. Is it because there are less people going to work? Or is it because it's the summer break for schools? As much as I like to bash the bears, I think they have a… Read more »

95 LilYpad

I am not following you. You are trying to say that the people that bought in 1997 made no profit after selling it in 2009? How is that even possible?

I have had friends that have doubled their money buying and selling the past few years. Even accounting for different mortgage rates, LOCs, substantive home repairs, they should have made some significant money…

NO -LYMPICS Says: Also from Garth’s blog: Some early 20-something friends of my daughter just took possession of a “fixer-upper” in Toronto they purchased. $525,000 with only $25,000 down. 6 bedrooms with plans that 4 of the bedrooms need to be rented to make the thing fly. The two big questions in my mind are: 1) What the hell are banks doing lending $500,000 to a couple of guys in their early 20’s…one has been working for about a year, the other for 3 years? 2) Where is education about financial commonsense? Both of these guys are very bright young people (according to their school marks). As Garth has pointed out…this kind of thing will not end well. ===== Really, how much of this is going on? Good question no -lympics, and the responsible saver with cash on the table… Read more »

Just had a conversation with a woman the other day who sold her Vancouver SFH in one day a few weeks ago. The house was assessed at $700k and it was listed for $799k and sold for the listed price. The house was bought by a family who had immigrated from Hong Kong in 1997. They have been living in a 2 bd condo downtown since arriving in Canada. There are five of them in the condo. Apparently they bought the house before having sold their condo which is still on the market. The woman who sold them her house told me she and her family are going to rent the 3 bd main floor of a Vancouver Special. I told her to make sure her profits are distributed for insurance purposes and she assured me there is no need… Read more »