buying a larger home - David Ingram

Dear David,
I need your advice on the following situation:
I currently own a townhouse in Coquitlam, worth approx 300,000 and have
about $200,000 in mortgage. I am single, live with 2 kids, make 63,000/yr,
43 yrs old, worked with the same company for 6 yrs (management). My mortgage
is quite high because I added the reminder of my student loan to the entire
amount. This is my first property and I used RRSP's to help with my down
payment. I am repaying them back on time.
I would like to purchase a home with a rental suite and have renters help
with the mortgage. I have no savings, all of my money goes to mortgage and
my RRSP's.
Question: Can I use more of my RRSP's to help me with the purchase of a new
property? My financial record is not the best, after 6 yrs in schools I had
to declare bankruptcy and Banks don't love me too much. I am afraid I might
not be able to secure a good loan at a good rate because of it.
Thanks David
david ingram replies:
What you are suggesting is likely a good idea.  Having a more expensive
house with a mortgage helper is a sensible thing to do in this day and age.
You can not take any more money out of the RRSP tax free but if you need it
to help with a down payment, taking it out and paying the tax may be the
best way to get the necessary money.
The RRSP is taxable in the future, the house, even with a rental suite is
capital gains tax free although the rent is taxable.
However, it is unlikely that the rent will be taxable for several years as
you deduct the relevent expenses against it.
And, if you use the techniques in the November 2001 newsletter in the top
left hand box at, you can make most, if not all, of your other
mortgage interest deductible as well.
David Ingram's US / Canada Services
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