At some point in their lives, most Canadians have probably asked themselves whether it is better to buy or rent a home. And purchasing a home is one of the biggest decisions most people ever make.

Ultimately, the decision is a personal choice, but it helps to look at the pros and cons of buying to determine whether home ownership is right for you.

Some advantages of buying a home

Owning a home is generally considered to be a sound, long-term investment that can provide satisfaction and security for you and your family.Each month when you make your mortgage payment, you are building equity in your home.

Equity is the portion of the property that you actually build through your monthly payment versus the portion that you still owe the lender.

At the beginning of your mortgage, more of your payments go toward paying off the interest and less toward paying off the principal. But the longer you stay in your home and the more mortgage payments you make, the more principal you pay off and the more equity you accumulate.

Most mortgages also offer you the option of making additional monthly or annual payments to reduce your principal faster. Some prepayment privileges, for instance, enable you to pay up to 20% of the principal per calendar year. This will also help reduce your amortization period (the length of your mortgage), which, in turn, saves you money.

There is also a tax advantage. If your home is your principal residence, any profit you make when you sell it is tax-free. A home can appreciate – or increase in value – as time passes, building more equity. As you build up equity, it’s usually easier to upgrade to a more expensive home in the future thanks to the profit you’ll make when selling your current home.

As an owner, you can also decorate and improve your home any way you like. Ownership tends to give you a sense of pride and can offer you and your family stronger ties to the community.

If you do decide that home ownership is right for you, it’s important to choose a home you can afford. If you can’t afford to buy your dream home, purchasing a more modest home can be a great place to start building equity that one day may allow you to buy the home of your dreams.

Since we’re currently in a buyer’s real estate market and interest rates have been dropping, now may be an ideal time to enter into home ownership for the first time.

Some disadvantages of buying a home

Since it’s easy to get caught up in the excitement of buying a home, it’s important to remember that home ownership has some additional responsibilities as well.

For one thing, a home can be expensive. Chances are, your monthly payments will be more than what you are currently paying in rent when you factor in such things as your mortgage, property taxes, repairs and general maintenance.Owning a home ties up some of your cash flow and is likely to reduce your flexibility to move to a new location or change jobs.

While your home might increase in value as time goes by, don’t expect to get a big return quickly. There are no guarantees that your home will increase in value, particularly during the first few years. In the beginning, you could actually lose money if you sell because your home may not have appreciated enough to cover the real estate fees, and moving, renovation and other selling costs.Real estate is, however, usually considered a good investment over the long term.

When making the decision about whether to buy or rent, it’s important to carefully choose a home you can afford, and then weigh the pros and cons. Millions of people enjoy the rewards of home ownership but, ultimately, it’s a personal decision based on your own priorities.

If you’re thinking of buying your first home, Dominion Lending Centres mortgage professionals can answer all of your mortgage-related questions.

Home care is something we often neglect. Between our daily and weekly to do lists, home care is something that often falls by the wayside. But it makes a big difference. Your home and property benefit from regular care checkups.

The good news is tackling home maintenance in 10-minute increments is the best way to get it done. We have listed below 5 ways you can keep your home feeling cared for below.

Replace your furnace filters seasonally. This is a good home care tip to do every three months at most. Doing this will increase your furnace efficiency by 15 percent!

Clean the air conditioner grill and register. The same as the furnace filter receiving routine care, this care time will improve efficiency.

Conduct a garage door safety check. Put the door into manual mode and lift it: it should glide smoothly and stay open on its own three feet from the ground. If not, have a pro counterbalance it. Put a medium-sized object on the ground (a small cardboard box or lightweight plastic laundry hamper, for example) and close the door. It should pop up as soon as it meets the obstacle. If not, call a professional to have your door checked and fixed.

Check your water heater for signs of leakage or rust. If the seams between the hot water tank and its connecting pipes appear to be rusty or corroded, it is time to call a professional to see if the tank can be repaired or if it needs to be replaced.

Clean your kitchen exhaust hood. This appliance is designed to filter airborne grease, combustion products, fumes, and smoke, so it’s important to take the time to clean it once in a while.

A recent survey put out by Royal LePage showed that a growing number of Canadian’s, particularly in the countries largest urban centers own more than one property. More than 10% of Canadians own at least two homes in areas of the Greater Montreal Area, the Greater Toronto Area, and Greater Vancouver.

The majority of the second property owners in Vancouver said that they are using the properties as rental income, even on a partial basis.

“Entrepreneurial landlords supply housing to the 30% of Canadians who rent, be they new immigrants, students, young people entering the labor force, or those who cannot, or choose not to, own their home,” said Phil Soper, president and CEO of Royal LePage.

Young buyers look to capitalize on the real estate market by investing in a property that will appreciate over time. Many people look to buy smaller condos or homes in area’s close to universities to capitalize where the rental market is very active among Students. Another trend within this increase showed parents who will purchase a property with multiple units for their children while they are studying and then use the property for rentals to other students.

Have you thought about owning a second property? We would be happy to discuss your property and financial goals anytime with you.

Below is some information that was provided by Enriched Academy pertaining to RSP’s and whether one should consider investing in them…

The RRSP Deadline is March 1, 2021. A comprehensive breakdown of the RRSP (Registered Retirement Savings Plan) and how to take full advantage of its features.

What is an RRSP? An RRSP is a registered retirement savings plan. It is critical to understand that your RRSP is not an investment. It’s an account that holds your investments. The difference between an RRSP that loses money and makes money, are the investments held inside the account. Remember this: Your RRSP is only as good as the investments inside of it. Pros: ✅ Tax free growth. Each year you do not have to pay divident, capital gains or interest on the growth of your investments. ✅ Tax deductible. That means you can claim the money you put in your RRSP as a tax deduction when you file your income tax return, which lowers the overall tax you pay. ✅ Freedom to choose your own investments (more on this a bit later) ✅ Unused contribution room can be carried over. If you don’t contribute ✅ Spousal RRSP can increase your tax savings even MORE! Cons: ❌ Taxable income upon withdrawal. When you invest in an RRSP and decide to take that money out, you will have to pay income tax. ❌ Further the first point, you will eventually have to pay tax on both the money you put in and the growth. There are ways to minize this through RRIF’s (Registered Retirement Investment Fund’s, learn more here) ❌ Forced withdrawal at age 71.

Three Common Myths About RRSPs You are limited to the investments you hold inside your RRSP. There are several different accounts that you can hold in your RRSP. You have to INVEST in something to take advantage of the RRSP tax refund. If you want to put money into your RRSP and are unsure of what to invest in, BUT still want to take advantage of the tax refund (will explain this later). You can simply transfer your money into your RRSP and leave it in cash until you’re ready to invest. RRSPs are a scam and not worth because you have to pay taxes in the end. Yes, you do  eventually have to pay tax, BUT don’t underestimate the power of interest-free growth and the tax deductions. Also, having a smart strategy on how you take that money out in a tax efficient way is key.

What you may not have known about RRSPs: 1) You are PAYING fees! 100%. The fees are dependent on the investments you own. Here is the MER (Management Expense Ratio), which is the annual fee you pay of on our our students.

2) There are two ways to take money OUT of your RRSP: You can borrow money up to $35,000 from your RRSP to buy your first house under the Home Buyers’ Plan (HBP). You won’t pay taxes on the withdrawals but you have to pay it back within a certain amount of time. If you or your spouse is considering going back to school, you can take out up to $20,000 to pay education costs under the Lifelong Learning Plan (LLP). You won’t pay taxes on the withdrawals but you have to pay it back within a certain amount of time. 3) Use your RRSP over contribution limit. You can over contribute by $2,000 to your RRSP before paying the fee of 1%. Some people purposely over-contribute up to the limit to take advantage of tax-deferred growth and compounding in their RRSPs. You can learn more here.

Did you know that most lenders have a “sliding scale” for purchases that are over 1.25 million dollars??

Most of our buyers believe that if you are purchasing over 1 million dollars you need 20% down… Which is true, until you hit the 1.25 million dollar mark.  At that point you will have to put more than 20% down.  The sliding scale differs with each lender, but the majority of them will lend up to 80% of the first 1.25 million and then up to 50-60% of the price above 1.25 million.

For example:  You are purchasing a home for 1.6 million dollars.  The down payment required would be $425,000.

$1,250,000 x 20% down payment = $250,000
$350,000 x 50% down payment = $175,000
Total = $425,000

If you are looking within that price range, contact us!!