In this issue

Hi Brenda

Welcome to the February issue of my monthly newsletter!

This month’s edition looks at the importance of getting a home inspection before you buy, as well as insights into growing your RRSPs and using them to buy a home. Please let me know if you have any questions or feedback regarding anything outlined below.

Thanks again for your continued support and referrals!

We’ve all heard the unfortunate stories. Someone with not enough insurance coverage is injured or killed in a tragedy leaving behind a mountain of debt for their loved ones. Often, you don’t want to spend the extra money on insurance, but when something happens it’s the best investment of your life.

The same can be said when you buy a home. It’s easy to get caught up in the moment when you’re looking for your forever home. You see all the glitter, but maybe fail to see not everything is gold. And that’s where a home inspection can come into play. For a roughly $500 investment on the biggest purchase of your life, it should be a no-brainer to have a home inspection, whether the home is 100 years old or brand new.

In many cases, people don’t bother to do a home inspection on a brand new build because they believe there will be no issues. But they me be surprised to learn that even brand new builds can have problems. And certainly with older homes, there are a plethora of issues, ranging from asbestos and electrical to the foundation.

Why people decide to pass on an inspection can vary. In hot markets like Vancouver or Toronto, bidding wars don’t offer the prospective buyer the time or flexibility to do an inspection. Some people also believe the results of the inspection have to be passed on to the lender. And while the purchaser may love the property, they don’t want any issues to scuttle their mortgage. But only in the rarest cases do the inspections get requested by the lender.

Getting an inspection will not only give you peace of mind when you sign on the dotted line, but it can also give your realtor an opportunity to negotiate any changes that need to be made to the contract.

But like anything these days, you’ll want to find a reputable home inspector who knows what they’re doing and knows what to look for. There are a number of resources to help you find the best inspector, including the Canadian Association of Home & Property Inspectors (CAHPI).

Even a thorough home inspection may not be able to turn up all the issues with a home. Below is a list of some of the most common latent defects in a home.

1) Bathing Area Issues

• Problem: Hidden water damage behind shower/ bathtub surround
• Implications: Extra costs will occur, water leaks

2) Pest Infestation

• Problem: pest activity in areas of homes
• Implications: Damage to home can occur, extra costs can arise, fire/safety hazards, air quality issues

3) Plumbing Pipes

• Problem: Polybutylene plastic fittings prone to leaking, insurability issues
• Implications: Water damage and or extra costs can occur, high insurance premiums and deductibles

4) Hidden Water Leaks

• Problem: Hidden water leaks
• Implications: Water damage and extra costs will occur, structural damage, air quality issues

5) Grade Levels

• Problem: Landscaping too high on structure of home
• Implications: Structural problems, extra costs can and will occur

It’s that time of year again. The taxman is coming and you’re going to have to get filing. For many, it’s the time to take a large sum of money and dump it into your RRSP contribution to reduce your taxes. But is it the best way to handle the investment? It may be too late for last year, but starting this spring, try taking a different approach. Instead of putting in one big chunk at the end of the year, have your RRSP contribution come out on a monthly basis. If you have it set up to come out automatically, you’re going to hate it for the first three or four months, but after a while you won’t realize it’s happening.

Besides being a forced savings plan for your retirement, RRSPs can be a big help for first-time homebuyers. First-time homebuyers can utilize up to $25,000 worth of RRSPs for a down payment on a home. They have 15 years to pay it back and can defer payments for the first two years. Utilizing your RRSPs toward a down payment makes perfect sense. That said, if you’re lucky enough to not need it, don’t use it.

Depending on the mortgage broker you speak to, they’ll tell you nearly half of first-time homebuyers use their RRSPs to help cover their down payment.

You also might not know that you could have been a homeowner previously and still be considered a first-time homebuyer. Under the federal government’s Home Buyers’ Plan, you are considered a first-time home buyer if, in the previous four-year period, you did not occupy a home that you or your current spouse or common-law partner owned. So if you’ve been renting for a few years but want to get back into the market, using your RRSPs is an option.

As always, it’s best to connect yourself with a great financial planner that understands what your goals are and is working in your best interest. Mortgage professionals can also lend a hand if you have mortgage related RRSP questions.

Homeowner Tips

Greener Laundry:

There’s a simple path to greener laundry: pick the cold water wash cycle! Around 90% of the energy used by washing machines goes to simply heating the water. Many people assume that they’re getting extra cleaning power by washing in hot water but, in most cases, washing clothes in cold water is just as effective as washing clothes in hot water. Hot water is sometimes beneficial when you’re trying to remove oily stains or sanitize heavily soiled items but, otherwise, wears out clothes quickly, causing them to fade, stretch and wrinkle. The hot cycles on most residential washing machines don’t even heat water to the temperatures required to destroy or remove a majority of allergens (55-60°C).