Mortgage Articles

By Kelly Hudson 13 Mar, 2024
Securing a mortgage significantly depends on your credit score and debt load. Understanding how different types of debt affect mortgage affordability is crucial. Debt falls into two categories: secured and unsecured. Secured debt, backed by collateral like a house or car, provides lenders security in case of default. Unsecured debt, such as credit cards, lines of credit, and student loans, poses higher risk for lenders and typically carries higher interest rates. Here's how different types of debt influence your credit score and mortgage approval: Credit Cards are unsecured debt, offering revolving credit lines with interest rates based on creditworthiness. Responsible credit card usage can positively affect credit scores, but defaults or late payments can lead to higher interest rates and decreased creditworthiness. Line of Credit : Like credit cards, lines of credit are unsecured and provide borrowers access to a predetermined credit limit. Responsible use can improve credit scores, while defaults can have negative credit repercussions. Student Loans: Despite being unsecured, they can enhance credit scores if paid on time. They contribute to the debt-to-income ratio. Auto Loans: Auto loans are secured debt, with the vehicle serving as collateral. They can diversify debt portfolios and improve credit scores. Existing Mortgage Loans: Secured by the property, timely payments enhance credit scores. Missed mortgage payments raise red flags for new lenders. Maintaining a balanced mix of debt types strengthens credit scores and mortgage eligibility. However, over-borrowing can be harmful.
By Kelly Hudson 07 Feb, 2024
When it comes to managing your mortgage, every payment matters. The frequency of your mortgage payments can significantly impact your financial strategy and overall budgeting. While monthly payments are the norm, alternatives like bi-weekly, semi-monthly, and accelerated options offer unique advantages and considerations. Let's explore how each frequency impacts your bottom line and helps you make informed decisions about your mortgage. Understanding Mortgage Payment Frequencies Mortgage payments are the backbone of homeownership, representing a blend of interest and principal. Interest accrues on the outstanding balance (principal), and once it's paid, the remainder of your payment goes towards reducing the principal balance (amount you borrowed). Here's a breakdown of the most common payment frequencies: 1. Monthly Payments (12/year): The most prevalent option, monthly payments simplify budgeting with 12 payments per year. They align well with most income schedules, offering convenience and consistency. 2. Semi-Monthly Payments (24/year): Occurring twice a month (typically 1st & 15th), semi-monthly payments result in 24 payments annually, equivalent to 12 full payments. While they offer structured budgeting, they lack the accelerated payoff benefits of other options. 3. Accelerated Bi-Weekly Payments (26/year): Accelerated bi-weekly payments involve paying every two weeks, totalling 26 payments annually (equivalent to 13 months' worth in a 12-month period). This extra payment each year accelerates mortgage payoff, reducing the principal balance faster and saving on interest over time.
By Kelly Hudson 04 Jan, 2024
This post is revised from Jan. 7, 2023 What is BC Assessment? It’s January 2024 and BC homeowners are receiving their property assessments. Residential asset prices in British Columbia stabilized over the past year, according to the province’s latest housing assessment figures. Metro Vancouver exhibited few price fluctuations. BC Assessment said that its latest evaluation, which reflected market conditions as of July 1, 2023, found that single-family homes in Vancouver saw a 4% increase in assessed values, exceeding $2.2 million. Conversely, strata properties exhibited stability, posting minimal change to remain at $807,000. BC Assessment is a provincial Crown corporation that values all real estate property in British Columbia. Every year, BC Assessment sends property owners a Property Assessment Notice telling them the fair market value of their property as of July 1 the prior year . To see the most recent assessment for a property, click on BC Assessment and type in the property address. The real estate market is the single biggest influence on market values. Market forces vary from year to year and from property to property. The market value on an assessment notice may differ from that shown on a bank mortgage appraisal or a real estate appraisal because BC Assessment’s appraisal reflects the value as of July 1 of 2023 , while a private appraisal can be done at any time. The assessed values are based on limited information and are a result of algorithms and mass appraisal techniques which have their limitations. Use your BC Assessment as a starting point for the value your home purchase… Do not rely on BC assessment for the exact value of the property you’re considering purchasing. Markets in BC change quickly both increasing and decreasing in value depending on the area and the economy.
By Kelly Hudson 05 Dec, 2023
Most Canadians are conditioned to think that the lowest interest rate means the best mortgage product. Although sometimes that is true, a mortgage is much more than just an interest rate. You can save yourself a lot of money if you pay attention to the fine print for the total cost of your mortgage. To pick the best mortgage, you need to understand how mortgages work and what your options are. This comes with Mortgage Intelligence (my specialty)! Once you’ve selected the type of mortgage, then you’ll need to work with your Mortgage Broker (me!) to find the best fit for you and your situation. Are you planning to move in the next 5 years (Upsize? Downsize?) Will your family be growing/shrinking? Will your employment change and if it does will you need to relocate? Would $1000’s in penalties impact you if you need to break your mortgage? What types of debts do you have? Credit cards? Car loan? Student loan? Line of Credit? Why do all this work? Because it will have a direct impact on your bottom line. A mortgage is made up of two parts—the principal and interest—you need to pay attention to how and when these parts get paid down. Ideally, you want to minimize your interest payments and maximize the principal payments. To pick the best formula for your situation, you’ll first need to understand some of the factors that impact how much interest you’ll pay for your mortgage loan. Here are 6 mortgage terms to help you make the best decision for your situation. Amortization Amortization is a fancy word that means the “life of your mortgage” OR how long it takes to pay off your mortgage if you paid your mortgage for “X” years. The amount of your mortgage loan repayment is calculated based on the length of time you agree to paying off that debt. In Canada, the standard amortization period is 25 years. If you have a 20% down payment (or higher) you could amortize over 30-years BLOG 5 GREAT Reasons To Provide a 20% Down Payment when Buying a Home Picking the best mortgage is not just about qualifying for the mortgage. The amortization period is integral in the best mortgage decision because it will decide how much or how little interest you will pay during the life of the mortgage loan. The longer the amortization period (25 years vs 30 years) the more interest you will pay. Therefore, a shorter amortization period will lower your overall cost of borrowing BUT you must be able to afford/qualify for the higher payments. Once you’ve decided on your amortization, you will need to decide how frequently you would like to make your mortgage payments. Every mortgage payment (consisting of both interest and principal) will help reduce your principal (the amount of money you borrowed) and eventually reduces the overall interest you pay on this loan. Monthly, bi-monthly, accelerated bi-weekly or weekly mortgage payments. BLOG Mortgage Payment Frequency - Accelerated Bi-Weekly vs Bi-Weekly Payments Term In the 1980’s mortgage interest rates were as high as 22%. Interest rates can change over time therefore, lenders don’t want to negotiate a 25-year loan at 5% interest if the interest rates go up to 10% in 5 years. To avoid the risk, lenders break your mortgage amortization into smaller terms. The term is shorter than the amortization period and locks you into your pre-negotiated rates during that time. The length of term you choose (most Canadians choose 5 years) will depend partly on if you think interest rates will rise or fall. Typical terms are: 1, 2, 3, 4, 5, 7 & 10. About 3-6 months before your current term matures, your current lender usually sends you a renewal notice with options on rates for the various terms they offer. Once your mortgage matures - you can stay with your current lender or move to a new lender. Once you get your renewal notice, you need to contact your mortgage broker (me!) to ensure you’re choosing the best option for your situation. BLOG Mortgage Renewal – 5 Things You Need to Know Closed Mortgage A closed mortgage usually offers the lowest interest rates. Closed mortgages cannot be paid off before the end of its term without triggering a penalty. Some lenders allow for a partial prepayment of a closed mortgage by increasing the mortgage payment or a lump sum prepayment. If you try and “break your mortgage” or if any prepayments are made above the stipulated allowance the lender allows, a penalty will be charged. BLOG Mortgage Penalties – Ouch… How Much?? Open Mortgage An open mortgage is a more flexible mortgage that allows you to pay off your mortgage in part or in full before the end of its term without penalty. Because of the flexibility the interest rates are higher. The interest rates for an open mortgage are typically 3-4% higher than a closed rate mortgage. i.e., a home buyer may pay 7.99% for a 5-year open mortgage vs. 4.99% for a five-year closed mortgage. If you plan to sell your home soon or expect a large sum of money, an open mortgage can be a great option. Most lenders will allow you to convert from an open to a closed mortgage at any time (and switch you to lower rates).
By Kelly Hudson 17 Nov, 2023
Securing a mortgage is a significant step in the home-buying process, and as you approach the finish line, it's crucial to exercise caution. Certain actions can potentially jeopardize your mortgage approval or affect the terms of your loan. We have worked together to secure financing for your mortgage. You are getting a great rate, favourable terms that meet your mortgage needs, the lender is satisfied with all the supporting documents. We are broker complete, and the only thing left to do is wait for the day the lawyers advance the funds for your mortgage. In my blog post, we'll explore the 8.5 things you should avoid doing before your mortgage closes to ensure a smooth and successful home purchase.
By Kelly Hudson 07 Oct, 2023
What is Porting a Mortgage? Porting your mortgage means taking your current existing mortgage (along with its current rates & terms) from your current property & transferring it to another property. People want to port their mortgage when they buy a new home and want to preserve their current interest rate OR avoid paying a penalty for breaking their current mortgage early. BLOG : Mortgage Penalties – Ouch… How Much?? What many people don’t realize is that if you decide to port your mortgage, it is like starting from square 1 on your mortgage. It requires a complete re-qualification for everyone on the mortgage, meaning a whole new application, all new employment documentation, a fresh credit check PLUS the new property needs to qualify (appraisal). Don’t worry if the mortgage you’ll need for the new property will be larger than your current mortgage – that’s very common when porting a mortgage. Most lenders will offer you what’s called a blend and extend. This is essentially a weighted average of the existing mortgage and interest rate, and the new money required at a current mortgage rate. Your mortgage is portable, right? Most lenders claim their mortgages are portable, however porting is so complex these days that it has become one of the more over-rated mortgage features. Let me explain: You don’t have enough income to qualify for the mortgage. If you don’t have enough provable income (i.e., your income has fallen since you last got approved), you could have a problem. If you become self-employed after your mortgage funds, but don’t have the required two years of tax returns showing sufficient earnings. BLOG : Self Employed?? Here’s What You Need to Know About Mortgages Your debt ratios are too high ( you’re spending too much of your income on mortgage & debts). If your monthly debt load and housing obligations have grown too large (more of your gross monthly income is needed to finance your home & debts), you’ll be declined. In January 2018 the federal government implemented a Stress Test. Whichever is the highest is how you must qualify for a mortgage. Qualify at the Chartered Bank Benchmark Rate (Government Rate) which fluctuates (currently 5.25%). OR the contract rate your lender gives you PLUS 2% i.e. 5.00% + 2% = 7.00% Since 7.00% is the highest – that would be the stress tested rate. If you must qualify for a mortgage at a rate 2% higher than the lender is giving you, your buying power decreases by about 20%. The new home purchase date doesn’t match up with the selling of your current home. If the purchase of your new home closes after the lender’s porting deadline. Typically, Lenders allow 30-120 days to port your mortgage from Property A to Property B (a few lenders allow up to 365 days). It can be difficult to get the closing dates of your current and new home to fall within porting deadline. Your new property doesn’t qualify. Lender may LOVE you, but they need to LOVE the new property as well. Many lenders have changed criteria on investment, leased land, age-restricted, remediated grow-op properties, well water, building flaws, co-ops, etc. Your credit score has fallen. The lender will look at your current credit score. If you no longer meet the lender’s minimum credit score (typically 680+), porting your mortgage may not be an option. OR if the lender allows you to port, you will pay a higher interest rate. BLOG: 8 Credit Rules You Need to Know, Before You Buy a Home You need more money. If you are upgrading your home, you will probably need a bigger mortgage. Some lenders will only port the exact same dollar amount. That means you may have to come up with the difference if you buy a more expensive home OR break your current mortgage. Please note that for lenders that allow a bigger mortgage, applying for more money while porting (a.k.a., a “port and increase”) could reduce your negotiating power because the existing lender knows you don’t want to pay a penalty to leave. Your current lender does not have to be competitive since you are “stuck with them” since you don’t want to pay the penalty for breaking your mortgage. You’ve got a variable-rate mortgage. Your lender may not port its variable-rate mortgages (many don’t), you may have to break it and pay a penalty. Some lenders will require you to convert your variable mortgage to a fixed rate before porting… typically you wouldn’t get the best rate. If your mortgage has a home equity line of credit (HELOC) component, note that some lenders refuse to port HELOCs You can’t get bridge financing. If your take possession of your new property before the sale completes on your old property, you need to “bridge” the down payment until you get the cash from your sale. The problem is, not all lenders offer bridge financing. If yours doesn’t, and you need it, and you can’t get it elsewhere, you may have to break the mortgage. BLOG: Bridge Financing – How Does It Work?? The property is outside the lending area. Some lenders have very restrictive lending areas. i.e., If you’re with a credit union, you generally can’t port out of the province. Many other smaller lenders have restrictions on rural properties, especially if the mortgage is not mortgage default insured . You want to keep your current maturity date. Some lenders require you to get a brand new 5-year term when you “port” your mortgage to a new property. A 5-year term “could” lock you in longer than you’d prefer at a worse rate than you like. Forewarned is forearmed. Understanding the pros & cons of mortgage portability can save you a lot of stress. The bottom line: Mortgages are portable (in theory). However in practice, over 60% of people can NOT port their mortgage. Any questions? Give me a call and let’s discuss a mortgage that works for you (not the bank)! Kelly Hudson Mortgage Expert Mortgage Architects – A Better Way Mobile 604-312-5009 Kelly@KellyHudsonMortgages.com www.KellyHudsonMortgages.com
By Kelly Hudson 07 Sep, 2023
Buying a home is an exciting and significant step in one's life, but for most people, unless they are independently wealthy, it often involves securing a mortgage to turn their home buying dream into a reality. Not everyone who applies for a mortgage gets approved. In my BLOG, we'll explore ten common factors that can affect mortgage eligibility. Low or No Credit Score: One of the most critical factors in mortgage approval is your credit score. Lenders use this score to assess your creditworthiness. A low credit score may result from missed payments, high credit card balances, or other negative credit history, making it challenging to secure a mortgage. Think of it from the lenders point of view… they are going to lend you Hundred’s of Thousands of dollars and the only indication that you will pay them back as promised, is by thoroughly reviewing your credit bureau. BLOG 8 Credit Rules You Need to Know, Before You Buy a Home BLOG 5 C’s of Credit to get a Mortgage Insufficient Income: Lenders need to ensure that you have a provable income to make mortgage payments. If your income is insufficient to cover the monthly payments or your debt-to-income ratio is too high, it can lead to rejection. Employed or Self Employed: Lenders prefer borrowers with a provable, stable employment history. Frequent job changes, unemployment periods or recently starting your own business, will raise concerns from the lender about your ability to repay the mortgage. BLOG Self Employed?? Here’s What You Need to Know About Mortgages High Debt Levels: Excessive debt, including credit card debt, student loans, or car loans, can have a negative impact on your mortgage approval. Lenders evaluate your debt-to-income ratio, and a high ratio may lead to your mortgage being denied. Insufficient Down Payment: Lenders require a down payment, typically ranging from 5% to 20% (or more) of the home's purchase price. If you can't afford the required down payment, it can be a significant barrier to mortgage approval. BLOG 5 GREAT Reasons To Provide a 20% Down Payment when Buying a Home BLOG Why You Need to Prove your Down Payment when Buying a Home BLOG How to Verify Your Down Payment When Buying a Home Inadequate Documentation: Failure to provide accurate or complete documentation can lead to delays and jeopardize your mortgage approval. Poor Mortgage Payment History: If you've previously defaulted on a mortgage or faced foreclosure, declared bankruptcy or consumer proposal, it will impact your chances of getting approved for a new mortgage. Lenders are wary of borrowers with a history of non-payment. Too Much New Credit: Opening multiple new credit accounts shortly before applying for a mortgage can raise red flags for lenders, as it may indicate financial instability or a higher risk of default. Property Appraisal Issues: Even if you meet the financial criteria, the property itself must pass the lender's approval including an appraisal. If the appraisal value is lower than the purchase price, it can create challenges in securing a mortgage. BLOG What Happens When Your Home Appraisal Comes in Low? BLOG BC Property Assessment vs Home Appraisal 2023 Co-Signer Issues: Having a co-signer on your mortgage can be helpful if you have credit or income challenges. However, if the co-signer has their own financial obligations or credit challenges, it can affect your mortgage approval. BLOG Would a Co-Signer Enable You to Qualify for a Mortgage? In conclusion, obtaining a mortgage is a significant milestone in the journey to homeownership. Hopefully, this list helps answer the common question borrowers ask when they are unable to qualify for a mortgage: 'Why?’ To increase your chances of mortgage approval, focus on maintaining a healthy credit score, managing your debt wisely, and working with your trusted mortgage broker will help you navigate the process and address potential obstacles. 
By Kelly Hudson 22 Aug, 2023
There seems to be some confusion about what it means to co-sign on a mortgage… and any time there is confusion about mortgages, it’s time to chat with Kelly Hudson, your trusted mortgage expert!! Thanks to tighter mortgage qualification rules and higher-priced real estate - particularly in the greater Vancouver and Toronto areas - it is not easy to qualify for a mortgage on your own merits. Let’s look at why you would want to have someone co-sign your mortgage and what you need to know before, during, and after the co-signing process. The ‘stress test’ has been especially “stressful” for borrowers. As of Jan. 1, 2018, all homebuyers need to qualify at the rate negotiated for their mortgage contract PLUS 2% OR the government posted rate which varies (as of Aug 2023 5.25%), which ever is higher . If you have less than 20% down payment, you must purchase Mortgage Default Insurance and qualify at 5.25%. If you must qualify at a rate higher than what you are paying… then your money doesn’t go as far… and you qualify for a smaller mortgage. In the wise words of Mom’s & Dad’s of Canada… “if you can’t afford to buy a home now, then WAIT until you can!!” BUT wait… in some housing markets (especially Vancouver & Toronto), waiting it out could easily mean missing out, depending on how quickly property values are appreciating in the area you want to purchase. If you can’t income qualify for a mortgage with your current provable income along with GREAT credit, your lender’s going to ask for a co-signer. In order to give borrowers, the best mortgage rates, Lenders want the best borrowers!! They want someone who will pay their mortgage on time as promised with no hassles. Co-sign vs Guarantor Short version: The main difference between a guarantor and a co-signer is that the co-signer is a title holder and a guarantor is not. However, both individuals are responsible for mortgage payments being made to the lender. Someone can co-sign your mortgage and become a co-borrower, the same as a spouse or anyone else who you are buying the home with. It’s basically adding the support of another person’s credit history and income to those initially on the application. The co-signer will be put on the title of the home and lenders will consider them equally responsible for the debt should the mortgage go into default. Another option is a guarantor. If a co-signer decides to become a guarantor, then they’re backing the loan and essentially vouching for the person getting the loan that they’re going to be good for it. The guarantor is going to be responsible for the loan should the borrower go into default. Most lenders prefer a co-signer going on title. More than one person can co-sign a mortgage although it’s typically the parent(s) or a close relative of a borrower who steps up and is willing to put their neck, income, and credit bureau on the line. Ultimately, if the lender is satisfied that all parties meet the qualification requirements and can lessen the risk of their investment, they’re likely to approve your mortgage. Before signing on the dotted line Short Version: A co-signer, in essence, co-owns the home with the individual living in it and paying the mortgage. A co-signer must sign all the mortgage documents and their name will appear on the title of the property. When you co-sign on a mortgage, you become just as responsible for the mortgage loan as the primary borrower — and you can suffer serious consequences if they make late payments or default. Anyone that is willing to co-sign a mortgage must be fully vetted, just like the primary applicant(s). They will have to provide all the same documentation as the primary applicant(s). Being a co-signer makes you legally responsible for the mortgage, exactly the same as the primary applicant(s). Please note as a Co-signer your future borrowing plans will be affected Since the mortgage will also appear on your credit report, this additional debt could make it tougher for you to qualify for additional credit down the road. For example: if you dreamed of one day owning a vacation home, just know that a lender will have to consider your co-signed mortgage as part of your overall debt-to-income ratio You are allowing your name and all your information to be used in the process of a mortgage, which is going to affect your ability to borrow anything in the future. If someone is a guarantor , then things can become even trickier as the guarantor isn’t on title to the home. That means that even though they are on the mortgage, they have no legal right to the home itself. If anything happens to the original borrower, where they die, or something happens, they’re not on the title of that property but they’ve signed up for the loan. The Guarantor doesn’t have a lot of control which can be a scary thing. In my opinion, it’s much better for a co-signer to be a co-borrower on the property, where you can be on title to the property and enjoy all the legal rights afforded to you. The Responsibilities of Being a Co-signer Co-signing can really help someone out, but it’s also a big responsibility. When you co-sign for someone, you’re putting your name and credit on the line as security for the loan/mortgage. If the person you co-sign for misses a payment, the lender or other creditor can come to you to get the money. Any late mortgage payments would also show up on your credit report, which could impact your own loan/mortgage qualification in the future. Because co-signing a loan has the potential to affect both your credit and finances, it’s extremely important to make sure you’re comfortable with the person you’re co-signing for. You both need to know what you’re getting into. I recommend Independent Legal Advice between all co-borrowers. Co-signing is NOT a life sentence. Just because you need a co-signer to get a mortgage does not mean that you will always need a co-signer. In fact, as soon as you can credit & income qualify without your co-signer – you can ask your lender to remove the co-signer from title. It is a legal procedure so there will be a cost associated with the process, but doing so will remove the co-signer from your mortgage loan and release them from the responsibility of your mortgage. Removing a co-signer technically counts as changing the mortgage, so you need to ensure that the lender you chose doesn’t consider removing a co-signer as breaking your mortgage. There could be large penalties associated with doing so. For more information, check out my BLOG Mortgage Penalties – Ouch… How Much?? 
By Kelly Hudson 03 Jul, 2023
The Basics The Tax-Free First Home Savings Account (FHSA) offers first-time home buyers the ability to save $40,000 tax-free. Like registered retirement savings plans (RRSP), contributions to an FHSA would be tax deductible. Like tax-free savings accounts (TFSA), income and gains inside the FHSA, as well as the withdrawals would be tax-free when used for purchase of an owner-occupied home. Who can open an FHSA? A resident of Canada Be as least 18 years old (and not more than 71 years of age on Dec. 31 of the year) First-time home buyer o This means you, or your spouse or common-law partner did NOT own a qualifying home that you lived in as a principal place of residence at any time in the year the account is opened OR the preceding 4 calendar years. NO minimum number of days the funds must stay in FHSA before being withdrawn How much can you contribute? You can contribute up to $8,000 each year (in the year that you open your first FHSA), with a cumulative total of up to $40,000 over your lifetime. You can carry forward your unused FHSA participation room at the end of the year, up to a maximum of $8,000 to use the following year. o This amount is referred to as your FHSA Carry forward. Any FHSA carry forward will be include in the calculation of your FHSA participation room for the year. The Details Why did the Canadian government create the Tax-Free First Home Savings Account (FHSA)? Housing affordability in Canada has been a hot topic for many years. Canada’s real estate has risen steeply for properties, especially in hot spots like Toronto & Vancouver. Saving a down payment is typically the biggest challenge for most Canadians buying their first home. In the Canadian Budget in 2022, the government proposed the introduction of the Tax-Free First Home Savings Account (FHSA) . This new registered plan gives first-time home buyers the ability to save $40,000 on a tax-free basis. $8,000 each year (including 2023), o The annual contribution limit applies to contributions made within the calendar year. Like a Registered Retirement Savings Plan (RRSP), contributions would be tax-deductible , and withdrawals to purchase a first home (including the investment income) would be non-taxable , like a Tax-Free Savings Account (TFSA). o You are getting the best of both account types with the new FHSA. The FHSA is designed to help Canadian residents who are first-time home buyers (aged 18+). The Tax-Free First Home Savings Account (including investment earning s& growth accumulated inside the account) can be kept open until the 15 th anniversary of the FHSA account opening OR if an individual turns 72 years old. Canadians can claim an income tax deduction for the FHSA contribution. Contributions that are made in the first 60 days of the year can’t be considered part of the previous tax year (unlike for RRSPs). Unused contribution portions can be carried forward into future years. Amounts to be carried forward only start accumulating after an FHSA is opened for the first time. The new FHSA can be opened just like you would open an RRSP or TFSA at the broker of your choice. Canadians can have more than one FHSA account, even across multiple financial institutions or brokerages. You are responsible for making sure that you do not contribute more than the annual limit to your FHSA account in total across all accounts . Only the FHSA owner can contribute to the account. Just like over contributions to a TFSA, over contributions to an FHSA are taxed at 1% per month. Any assets in an FHSA that are not used to buy a home that qualifies, can be transferred tax-free into a Registered Retirement Savings Plan. Once a qualifying withdrawal has been made from a FHSA, the remaining balance of the account can be transferred to a RRSP or RRIF by Dec. 31 st of the year after the qualifying withdrawal. By allowing you to contribute pre-tax income to an FHSA, the account can quickly grow to meet the minimum down payment value of some properties in Canada. It can give eligible first-time home buyers a tax advantage over those that are using an FHSA. FHSA Transfers If funds contributed to an FHSA are not used within 15 years from account opening (or Dec. 31 st of the year the account owner turns 71) the account holders will have the option to transfer the accumulated funds into their RRSP/RRIF, even if they don’t have contribution room. Funds can be transferred between an FHSA account and the following accounts tax-free: Another FHSA RRSP RRIF When you are transferring money between these accounts, you must follow the rules for each account type. 
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