RRSP Question

[workman]

Can anyone give me a solution for placement of RRSP`s? I purchased a home with an "Agreement for Sale". I am not on title. The home has lots of equity. I would like to place a second mortgage on the home but can I do this? I have spoken to Olympia Trust and they were unsure.


Thanks


Jody Workman

 

[gwasser]

QUOTE (workman @ Jan 30 2010, 08:45 PM)
Can anyone give me a solution for placement of RRSP's? I purchased a home with an "Agreement for Sale". I am not on title. The home has lots of equity. I would like to place a second mortgage on the home but can I do this? I have spoken to Olympia Trust and they were unsure.





Thanks





Jody Workman




Try this link - lots of discussion on the topic. http://myreinspace.com/public_forums/General_Discussion/61-11899-Lending_mortgage_funds_within_RRSPs.html



Also, you may want to reconsider. With the Agreement for Sale you may not have a lot of recourse if the 2nd mortgage goes wrong. I suggest you wait until you own the place.

 

[BarryMcGuire]

You would have to find a lender who would accept a pledge of your equity in the property secured most likely by a promissory note registered against the property by way of a caveat. Before spending a lot of time finding a lender, check with Olympia on whether the above described scenario is an acceptable RRSP investment under their rules as trustees. Your circumstances are not a common occurence so don`t expect this to be easy on any front.

Cheers

Barry

 

[tonypeters]

Jody,

I have used a lot of RRSP money over the years, but I have never tried to leverage off of equity in a "AFS" (Agreement For Sale) situation. A nice idea, but you may very well run into some roadblocks on this one. Why? Not that many years ago RRSP`s were abused by many as a result of overstating the value of the real estate the RRSP`s were being registered against. And in some cases by as much as 25%.

As a result, the Federal Government stepped in and imposed a whole bunch of new rules. This was a good thing, but it essentially made the use of RRSP money a little less attractive. They did this to protect "their" money, or as I otherwise like to refer to it as..."the sacred money".

At one time a "CMA" (comparative market analysis) was acceptable. Now they require a "certified" appraisal. At one time you could use 100% of the market value. Now they discount the value by 10% before you even start. They did this to build in a safety factor or cushion.

Let me know how you make out with this one.

Good luck!

QUOTE (workman @ Jan 30 2010, 08:45 PM) Can anyone give me a solution for placement of RRSP`s? I purchased a home with an "Agreement for Sale". I am not on title. The home has lots of equity. I would like to place a second mortgage on the home but can I do this? I have spoken to Olympia Trust and they were unsure.


Thanks


Jody Workman