Which is better, renting or buying?

Which is better, renting or buying?

In most cases, it's better to buy a home than to rent.  You've probably heard statements like:

“If you rent, you’re throwing away your money.”


“Owning your own home is a forced savings plan.” And “Home ownership is an excellent path to build wealth.”

Such sentiments are common in any discussion that involves home-buying and personal finances. It’s common knowledge that buying a home is a better financial move than renting. After all, you’re building equity instead of throwing away your money, right? Well, maybe not quite. Renting makes more sense if:

1. You have a lot credit card debt and have yet to save a down payment.
2. You envision moving very soon
3. Your calculations show that the cost of renting is a better deal than the cost of buying.
4. You don't really want the responsibilities and risks associated with being a homeowner. 

There's absolutely no rule that says you must own. 

Whatever feels right to you is the right move—as long as you can afford it.

Become an informed client.

For more information call your Toronto Mortgage Broker at 416-920-9930

Or Visit us online at www.eddiemac.ca

Tips on how to reduce your mortgage and save for the long term.

Tips on how to reduce your mortgage and save for the long term.

1. Always go biweekly on your mortgage payments and NOT monthly. Monthly payments will work out to 12 installments and biweekly will end up to be 13 monthly payments a year.

2. Always try to exercise your pre-payment privilege each year. Most banks you can put 10-20% on the original mortgage towards the principal. So when you have extra money, your tax refund or vacation pay, put it towards the mortgage principal.

3. Go variable but make your mortgage payments based on the fixed. This way you will be throwing more principal towards your mortgage

4.   Sometime’s it not only the mortgage that people have to pay. It is also the other debt such as car loans and credit cards. It is best to refinance the mortgage plus the debt and make one payment and that way you are able to save money and be more aggressive on your mortgage payment

That is why is important to speak to the mortgage broker to teach you all the options you can exercise.

Should I refinance my mortgage?

Should I refinance my mortgage?

The answer is “yes”.

WE should learn to make life easier by adding all the debts into one.

So if you have a mortgage and line of credit payments, car payments and credit card debts it would make sense to combine all into one. Canadians always complain we work a lot but in the end of the month, there are never enough funds to cover everything.

Some people often say that a car payment with zero percent doesn't make sense to add onto the mortgage. But I disagree. If a client is sick, they will have to make the mortgage payment and the car payment regardless. However, if they have one payment on the mortgage and things are financially tight, they can reduce the mortgage payments.

Remember, banks when they give you credit they know statistically the odds are against you. You could loose your job, get sick, go through a separation or loose your marbles and eventually will have several payments and it will be difficult to pay every off at once.

So my advice is to make things simple. Make one payment without the headaches.

Be an informed client.

What is a bridge loan?

Sometimes when you buy a home, the closing date for the home you are selling does not match the closing date of the house you are buying.    Some of the typical reasons for a difference in closing dates might be:   you want to get some renovations completed on the home being purchased before moving into it or perhaps you could not get the seller to give you the closing date that you really wanted.   So if the closing date of the home you are buying is before the closing date of the home you have sold, you will need a bridge loan.

The bridge loan amount is really your total down payment, less your deposit because the lender is advancing the rest of the mortgage money on the closing date for the home you are purchasing.



For a Bridge Loan, the lender will sometimes ask that the bridge loan be secured on the property being sold.   Some lenders will also charge a bridge loan “set-up fee”.  Also, remember that a property sale must be firm before a lender will arrange a bridge loan for the borrower(s).  And finally, lenders will not advance more than 90% of the value of the property being sold.



Always become an informed buyer.

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