Purchase Plus Improvements

Looking to buy a home that needs just a little TLC but don’t have the cash to complete the needed updates? No problem! We have lenders who offer a purchase plus improvements product that allows you to purchase the home, and add a little extra to the mortgage for the cost of the renovations.

A few things to keep in mind*:

1. improvements must improve the value of the home (ie: bathrooms, kitchens, new flooring, etc.)

2. the maximum amount of improvements is $40,000 or 20% of the purchase price

3. estimates are required up front, along with the mortgage application

4. most lenders will do only a single advance of the improvement funds, once the improvements are completed. So that means, you may need to make arrangements in the short term to carry the cost of the improvements until they’re fully completed. That may be in the form of a personal line of credit, a credit account at the local building centre, personal savings, or a combination of all three.

5. an inspection will be done to confirm the project is complete, and the subsequent funds will be forwarded to you. At this point, you would be able to pay back any of the accounts/funds you used to carry the cost during the renos.

*this list is a guideline only, and may vary from lender to lender. It may also vary, depending on client qualifications.

As always, I’m happy to answer any questions you may have! Also, feel free to share or tag someone you think may benefit from this information.



Sylvia Reimer, Mortgage Broker

Cell: (204) 392-6750

Email: sylvia_reimer@centum.ca


Don’t be this client…or this sales person, for that matter!

If you are looking at buying a new home, or I’m assisting you in refinancing your existing home, please discuss all big purchases or job changes BEFORE you purchase/change them.

It might be obvious to some of you, but especially first-time home buyers are often not aware that this could drastically affect your buying power.

I’ve outlined a few reasons below:

1. Buying power – the car (or other large purchase) you are looking at may come with a large loan payment that you now have to add to your debt service ratios, and may reduce the amount of home you’re able to qualify for.

2. Credit score – If you’re shopping for a car/furniture/etc, you’re likely going to several different dealerships, stores and possibly several banks to try and find the best loan rate/terms available. Which is totally in your right to do, however, keep in mind that every one of these establishments will be looking into your credit which can negatively reduce your credit score. This is especially important to note for anyone whose credit score is ‘on the edge’. If you’re in the 700+ range in credit score, this may not affect your mortgage application at all, even if it does drop to just below 700. But if you’re already in the low 600’s, and this causes your score to drop even further, it’s worth taking a moment to weigh the pros and cons.

3. Job changes – I understand that changing jobs is sometimes unavoidable if the company is downsizing and you’re one of the employees caught in the lay offer, or if you are moving from another location or province. But if you are just simply looking to change it up, please wait until after you’re in your new home or your refinance has been completed.
Switching jobs generally means several things:
a) probationary period (lenders will require to have written confirmation that you are past your probation period, and are considered a permanent employee.)
b) possibly a totally new industry (meaning you could have been an insurance rep before, and now you’re trying something new like operating heavy equipment. Totally different lines of work, which is considered risky.)
c) wages could vary

So, the moral of the story is to make sure you check with me before you replace those couches or buy that gorgeous new car or decide you’re sick of your current job and make a switch. I’ll be able to let you know pretty quickly if it’s a wise decision or if you should hold off for a little longer.


Sylvia Reimer, Mortgage Broker

Cell: (204) 392-6750

Email: sylvia_reimer@centum.ca

How do RRSP Withdrawals Work?

You’ve heard about RRSPs and how great they are. You know that they offer some amazing tax benefits and that they’re pretty much essential if you want to maximize your retirement savings. (They’re called Registered Retirement Savings Plans after all!) But how exactly do RRSP withdrawals work? Withdrawals are a common source of confusion when it comes to RRSPs, and not knowing the rules can definitely cost you. But don’t let that stop you from getting one! In the following post, I’ll outline exactly how withdrawals work so you can get the most out of your RRSP.

When can I withdraw from my RRSP?
If you thought you had to wait until you retire to withdraw from your RRSP, you’re mistaken. Investments can be withdrawn from your RRSP at any time, but when you do make a withdrawal, those funds will be treated as income in that year. What does that mean? Those funds will be taxed at your marginal tax rate, just like any other income you make that year.

What happens when I withdraw from my RRSP?
Let’s take a look at an example to see exactly what happens when you make an RRSP withdrawal.

Let’s say you make $73,000 a year and your top tax bracket is currently 32.98%. You decide to make a $10,000 withdrawal from a High Interest Savings Account within an RRSP. Here’s what would happen:

  • Immediately
  • Withholding tax applied: $10,000 @ 20% = $2,000
  • Much like when you receive a paycheque from your employer, the bank would immediately apply a withholding tax on the withdrawal. For this amount in Ontario, the tax applied is 20%.
  • At tax time
  • Marginal tax rate applied: $10,000 @ 32.98% = $3,298
  • At tax time, your marginal tax rate would be applied to the withdrawal, and if there’s a difference, you’ll have to pay that, or you’ll receive a tax refund.
  • You owe
  • Amount owed at tax time: $3,298-$2,000 = $1,298
  • In this example, you owe an additional $1,298 at tax time (since 32.98% > 20%).


Contribution room
The other important consideration to make before making an RRSP withdrawal is that you will lose your contribution room. That’s right, this contribution will be gone-permanently. This is in contrast to TFSAs, which allow you to add withdrawn funds back in the following year.

When is the best time to make an RRSP withdrawal?
Remember: the basic idea behind RRSPs is that they are a tax deferral strategy. In addition to the tax-free growth of your investments, they allow you to avoid paying taxes on your investments now and instead pay taxes when you withdraw your investments from the RRSP.

So, while you can withdraw money at any time, you’ll maximize tax savings by putting money into an RRSP when you’re in a high tax bracket (in your working years) and withdrawing the money when you’re in a lower tax bracket, (like retirement).

Special withdrawal programs
Is there any way to withdraw without a tax burden? Luckily, the government offers a couple special withdrawal programs to help you with some key life purchases.

    • Home Buyer’s Plan: The first is the Home Buyer’s Plan. This allows you to withdraw up to $25,000 per spouse from your RRSP to buy a home. You don’t have to pay tax on this withdrawal immediately, and you have a total of 15 years to pay it back. Basically, 1/15 of the withdrawal is due back per year (beginning in the second year after your home purchase), otherwise you will pay tax on the amount due that year.


  • Lifelong Learning Plan: The second is the Lifelong Learning Plan. This allows you to withdraw $20,000 per spouse for education. You can withdraw $10,000 per year, and you have 10 years to pay it back. Like the Home Buyer’s Plan, 1/10 of the withdrawal is due back per year (beginning in the fifth year after your first withdrawal or your first year out of school), otherwise you will pay tax on the amount due that year.

I hope I’ve given you more confidence when it comes to RRSP withdrawals. If you take one thing from this article, just remember to carefully consider the tax implications of an RRSP withdrawal before making one. And of course, don’t forget that with any withdrawals-whether you’re taking advantage of a special withdrawal program or not-you are sacrificing the potential growth of the investments.


Source: Lloyd Alexander