Why You Should Do Your Taxes If You Want To Buy A Home This Year
If you’re planning to buy a house this year, before you shop around for real estate, you first need to get your income taxes in order. The status of your taxes directly impacts your ability to obtain mortgage finance as mortgage providers must scrutinize tax statements before funding the purchase of a home.
If they notice you have pending dues you owe to the Canada Revenue Agency (CRA), lenders may classify you as a risk and avoid lending to you. Similarly, your income tax amount and savings may influence how much financing you will receive.
To help you avoid shrinking your mortgage opportunities as a result of not filing your taxes, Doria Zacharias, a premier mortgage agent at Dominion Lending Centres, has compiled a list of three situations where filing taxes may impact your ability to qualify for a mortgage. Keep reading to see how you can benefit from regularly filing your taxes!
1. You can’t buy a home if you have outstanding taxes with the CRA.
Keep your taxes up to date to make sure you pay the government what is due to it. If you have any outstanding amounts, you may not get the mortgage you need to buy a house. This is because all lenders check your income tax to know more about your financial stability.
Paying income tax is mandatory, and if you have outstanding dues, you will need to pay the government first and only then the mortgage lender. That can inconvenience the lender, and as a result, they may not lend to you.
2. Mortgage brokers use the income you declare on your taxes when applying for your mortgage.
Keep in mind that when doing your taxes the amount you claim and pay is the amount mortgage brokers use to qualify you for a mortgage. As a result, it is essential to file your taxes regularly, avoid maintaining any overdue amounts, or collecting any penalties from the CRA.
3. Use RSPs as a downpayment.
The retirement savings plan (RSP) is an investment account. It holds many assets including savings accounts, mutual funds, mortgage loans, exchange-traded funds, and other investments. All the money put into RSP accounts is tax deductible, which means it reduces the amount of tax a person pays on their income, which provides you with more savings. Also, you can withdraw from this account before retirement to meet the downpayment requirement of your new home.
If you're looking for more information to understand how to employ your RSP or income tax to your advantage while applying for a mortgage, reach out to Doria Zacharias, the most dedicated mortgage agent in Grande Prairie, Alberta. Besides finding you the right lender for your specific mortgage needs, I also make sure to educate you on the most appropriate options to support the purchase of your dream home.
I understand that buying a home can be stressful and complicated, and I work hard to make the process much more straightforward and completely stress-free. After finding you the ideal mortgage product I also help you prepare to qualify for it. I take you through the paperwork, show you how your credit score reflects your credibility, what expenses you must consider, and yes, how your taxes impact your shot at obtaining a mortgage.