When was the last time you heard some good news about your RSPs? It has been a long time and with the state of the global economy the way it is – I wouldn’t hold my breath on things getting better any time soon. So what can we do? Here is a less known but excellent option for those who are finished with seeing their hard earned dollars go down the drain.
Self Directed RSP Mortgage in Brampton
One of the more creative ways I assist my clients is in how to get your RSPs working for you. Through the Self Directed RSP Mortgage any Canadian can lend their RSPs into an approved mortgage. The problem is that you can’t lend them to yourself. You have to lend them to an arms length party who will be bound by a mortgage contract paying a market interest rate back to you. In this problem there is a hidden opportunity. Let me explain:
Liddy and her good friend Bel were sick and tired of seeing their company matched RSP contribution statement show a loss each year. Liddy being in the accounting department was particularly upset. After doing the math she was finding that even with the company matching each before tax dollar she put in to her RSP, that she was falling behind. Adding the financial planner taking the management fee plus the loss to her principle due to market swings and a factor for inflation – this equaled one frustrated employee. She shared her findings with Bel and our two friends came to see me as their Brampton Mortgage Broker to ask me a couple of questions and see what they could do.
Real Estate Investment RSP Mortgage Swap
Once seated comfortably with a hot coffee in hand, I explained to Liddy and Bel their options. As they were peers in their industry as well as friends, they had a similar tenure with their company as well as a similar 80-90K in their RSPs. This brought me straight to my point in that they would be able to utilize the Self Directed RSP Mortgage to their mutual advantage. As non blood relations, Liddy could lend her RSPs in a mortgage to Bel and vice versa. This opened a whole world of opportunity to our friends. Not only were they eligible to borrow from each other to invest in real estate property, they could do it on their terms and not the banks. Liddy grew up in a family that had owned and managed property back in her country of origin and she was the first to light up. Now she could purchase that investment she had her eye on for so long. There was a 4plex up where her brother lived that was currently listed for 400K and with an 80K down payment or 20%, she would be able to begin moving towards her retirement goals. Bel was a little confused so I elaborated.
The Bank of Me, Myself, and I
The beauty of doing business with friends is just that. No more restrictive terms and conditions of the bank’s mortgage fine print. The mortgage contract is as restrictive or not as the mortgage lender desires. Don’t want a three month penalty to pay off the mortgage early…Don’t. And the beauty of lending to one another is that the interest rate you pay to each other is a wash if you decide to match loan for loan. This is how doing business at the Bank of Me is different. And now Bel was beginning to understand. She saw that by becoming the bank for her friend Liddy and lending her RSPs in the form of a mortgage, that she was enabling her friend to start moving towards her dreams – and her own as well. With Liddy’s guidance, this pair found new hope and was well on their way to becoming self sufficient in an ever changing world.
Self Directed Success
There is much more to the details of this creative mortgage strategy. I truly recommend sitting down with a Brampton Mortgage Broker to get the details and ensure you are implementing the strategy in a safe and proper manner. Whether you are looking to consolidate debt, renovate your home, or invest in real estate, the Self Directed RSP Mortgage swap is a vehicle that you and a friend can utilize to make it happen. I will work with you to set up the accounts, guide and answer all of your questions, and assist in evaluating investment opportunities that come available. Take a moment and invest in yourself by contacting me below to learn more.
