Blog Archives - Page 24 of 35

Housing Market Predictions?

January 12, 2022 By Administrator

According to the 2022 Canadian Housing Market Outlook Report from RE/MAX, steady growth is anticipated across the Canadian real estate landscape into 2022. While Canadians continue to recognize the value and investment potential of their home, market challenges (such as rising prices and limited supply) maintain their impact on local markets.

It is estimated that Canada will witness an approximate 9.2% increase in average housing prices across the country as a result.

One of the key trends we see continue from 2021 into 2022 is inter-provincial migration occurring in many regions as a result of supply and affordability of homes across Canada. Individuals are also looking for larger homes with more space for growing families. While there is potential for the real estate conditions to continue to shift, 49% of respondents view Canadian real estate as a top investment option and believe the market will remain steady throughout 2022.

Below are some key regional forecasts from Moody’s Analytics and Real Property Solutions (RPS) for 2022:

British Columbia

Housing markets in BC are also overvalued, particularly in Vancouver and other metro areas. As a result, these areas will continue to have a downward pull on housing prices due to reduced affordability.

Alberta & Saskatchewan

Currently considered “undervalued” housing markets, they are likely to do better despite weaker economics as they have retained better affordability.

Manitoba

Lifestyle shifts, such as hybrid working environments and younger couples enjoying the freedom to work from home, predicts that Winnipeg will continue to be a seller’s market through 2022 with high demand for one- and two-story detached homes.

Ontario

Smaller metro areas (Brantford, Kitchener, Kingston, London, Windsor and Ottawa) are expecting the strongest house price appreciation rates. With regards to The Greater Toronto Area, this region currently suffers from over evaluation. However, housing prices have shown less sensitivity to this based on historical data so they are likely to experience less downward pressure.

Quebec

This province presents important contrasts as Montreal is the only metro area in Quebec not in the correctly valued range (plus or minus 10%), and will experience a downward pull on housing prices due to reduced affordability.

Nova Scotia & New Brunswick

The highest home price appreciation is expected to occur in the metro areas of Moncton and Halifax.

Newfoundland & Labrador

Aside from the Prairies, this Atlantic province is expected to see housing price growth move at a faster rate.

If you are looking to buy, sell or simply review or renew your mortgage in 2022, please do not hesitate to reach out to me! I would be happy to review your situation with you and help you make the best decision for you and your family now, and into the future.

7 Steps for Mortgage Prep

November 4, 2021 By Administrator

Step 1 – Your Credit Score

Whether you qualify for a mortgage through a bank, credit union or other financial institution, you should be aiming for a credit score of 680. 680 for at least one borrower (or guarantor), especially if you are putting under 20% down. If you are able to make a larger down payment of 20% or more, then a score of 680 is not required.

If your credit score does not meet the minimum requirements, there are a number of things you can do. Here are some ways to improve it:

Paying your bills in full and on time. If you cannot afford the full amount, try paying at least the minimum required.
Pay off your debts (such as loans, credit cards, lines of credit, etc.) as quickly as possible.
Stay within the limit on your credit cards and try to keep your balances as low as possible.
Reduce the number of credit card or loan applications you submit.
Considering an Alternative Lender (or B Lender) if you are struggling with credit issues.

I can help review your credit score and provide you with options for your mortgage needs.

Step 2 – Your Budget

When considering your budget, it is important to look at the purchase price budget, as well as your cash flow budget. Being house rich and cash poor makes for a no-fun home! The home price based on your cash flow budget may be dramatically different from the budget home price you qualify for. Not only does having a budget help you to understand your purchase price range and help you to find an affordable home. It can also help you to see any gaps or opportunities for future savings. This will be instrumental when you become responsible for mortgage payments.

Step 3 – Your Down Payment

The ideal down payment for purchasing a home is 20%. However, we understand in today’s market that is not always possible. Therefore, it is important to note that any potential home buyer with less than a 20% down payment MUST purchase default insurance on the mortgage, and they must have a minimum down payment of 5%.

The down payment on your home could come from your own savings such as a savings account or RRSPs. Thanks to the federal government’s Home Buyers’ Plan, potential first-time home owners are able to leverage up to $35,000 of your RRSP savings ($70,000 for a couple) to help finance the down payment. A gift of a down payment from an immediate relative is also acceptable. If your down payment comes from TFSA or RRSP, the bank will want 90 days of statements to ensure the funds are accounted for. Gifted funds rarely require 90 days of proof.

Step 4 – Your Mortgage Options

Rate is only ONE of the many features in selecting the best mortgage product that meets your financial goals. With access to hundreds of lending institutions, I am familiar with a variety of mortgage products allowing them to help find the best mortgage for YOU! Plus, unlike banks, mortgage agents are a third-party service focused on YOUR needs. This means that you can get the best rates and unbiased advice all for FREE from someone whose only goal is helping you achieve your dream of home ownership.

Step 5 – Your Paperwork

When you apply for a mortgage, you will typically need to provide a standard package of documents, which almost always includes:

Your government-issued personal identification
One month of recent pay stubs from any applicants who will be listed on the loan
Letter of employment
Your most recent two years’ worth of personal CRA tax filings and financials (if incorporated)
Three months of bank account statements
Your down payment (minimum 5%)
Documentation to explain any unusual (generally non-payroll) large deposits or withdrawals

Step 6 – Your Pre-Approval

To have the best success with your mortgage, it is recommended that you get pre-approved! This can be done through your Mortgage Professional to ensure that you get the best mortgage product FOR YOU, from the best rate to the best term agreement. Pre-approval helps verify your budget and allows your real estate agent to find the best home in your price range.

Pre-approval guarantees the rate offered and locks it in for up to 120 days. This protects you from any increases in interest rates while you are shopping (phew!).
Pre-approval lets the seller know that securing financing should not be an issue, which is beneficial in competitive markets!

Quick Tip: Don’t forget about the closing costs! These range from 1 to 4% of the purchase price and should be factored into your budget.

Step 7 – You’re Ready to Shop

You made it!! Once you have your down payment and have qualified for a pre-approved mortgage (your credit score is in order and all documentation has been provided), you are ready to start searching for your perfect home. If you’re stuck, I would be happy to give you recommendations for a realtor, if you don’t have one already.

Mortgage Up for Renewal??

When it comes time to renew your mortgage, most lenders will send you a renewal letter when there is around 3 months remaining on your term. While nearly 60% of borrowers simply sign and send back their renewal without ever shopping around for a more favorable interest rate, I would urge you to take a moment to check out your options.

Most standard mortgages are on a 5-year-term, meaning the market rates could be very different from the time you initially began your term to today! Despite this, lenders tend to provide higher rates on renewals versus new clients as typically the ease of renewal will prevent you from seeking out new rates. But, with my help, finding a better rate is not as difficult as it sounds – and it could end up saving you a couple hundred dollars a month!

It may turn out that your bank is offering a great rate, in which case you can simply submit the renewal! However, I urge you to take this opportunity to contact me about finding a lower rate to ensure you aren’t missing out. As your trusted mortgage advisor, I have access to dozens of lenders and hundreds of rates allowing me to narrow down the best options for you.

If your mortgage is coming up for renewal in the next four to six months, and you want to find out what lower rates may await you, contact me today! I can help you find the best option for where you are at in your life now and help you to ensure future financial success. I promise you will thank yourself for reaching out!

How to Get a Better Credit Rating

October 12, 2021 By Administrator

Low Credit is Spooky! Get Better Credit With The 5 C’s

Want to know how to get a better credit rating? Buying a home is an incredible step in life, but it is not without its hurdles! One of which is demonstrating that you are creditworthy, which all comes down to your ability to manage credit. This is how lenders and credit agencies determine the interest rate you pay. A higher credit rating could mean a lower interest rate and save you thousands of dollars over the life of your mortgage.

There are several attributes that lenders consider before granting credit, and these are commonly referred to as the “Five C’s” and consist of: Character, Capacity, Capital, Collateral and Conditions. Let’s take a closer look at each:

Character

The first C focused on YOU and your personal habits, which comes down to whether or not it is in your nature to pay debts on time. The determining factors for your credit character include the following:

Whether you habitually pay your bills on time
Whether you have any delinquent accounts
Your total outstanding debt
How you use your available credit:
Quick Tip: Using all or most of your available credit is not advised. It is better to increase your credit limit versus utilizing more than 70% of what is available each month. For instance, if you have a limit of $1000 on your credit card, you should never go over $700.
If you need to increase your score faster, a good place to start is using less than 30% of your credit limit.
If you need to use more, pay off your credit cards early so you do not go above 30% of your credit limit.

Capacity

The second component relating to your credit rating is your capacity. This refers to your ability to pay back the loan and factors in your cash flow versus your debt outstanding, as well as your employment history.

How long have you been with your current employer?
If you are self-employed, for how long?

Don’t be confused as capacity is not what YOU think you can afford; it is what the LENDER has determined that you can afford depending on your debt service ratio. This ratio is used by lenders to take your total monthly debt payments divided by your gross monthly income to determine whether or not you are able to pay back the loan.

Capital

Capital is the amount of money that a borrower puts towards a potential loan. In the case of mortgages, the starting capital is your down payment. A larger contribution often results in better rates and, in some cases, better mortgage terms. For instance, a mortgage with a down payment of 20% does not require default insurance, which is an added cost. When considering this component, it is a good idea to look at how much you have saved and where your down payment funds will be coming from. Is it a savings account? RRSPs? Or maybe it is a gift from an immediate family member.

Collateral

Collateral is what is pledged against a loan for security of repayment. In the case of auto loans, the loan is typically secured by the vehicle itself as the vehicle would be repossessed and re-sold in the event that the loan is defaulted on. In the case of mortgages, lenders typically consider the value of the property you are purchasing and other assets. They want to see a positive net worth; a negative net worth may result in being denied for a mortgage. Overall, loans with collateral backing are typically more secure and generally result in lower interest rates and better terms.

Conditions

The conditions of the loan can also influence the lender's desire to provide financing. Conditions can include: interest rate, terms, length of loan and amount of principle needed. Typically lenders are more likely to approve specific-loans, such as a car loan or home improvement loan or mortgage as these have a specific purpose, as opposed to a signature loan.

There is no better time than now to recognize the importance of your credit score and check if you are on track with the Five C’s and your debt habits. A misstep in any one of these areas could be detrimental to your efforts to get a mortgage. If you are not sure or want more information, please don’t hesitate to reach out to me today to determine your current credit score and if there are areas for improvement to help you get a better interest rate and mortgage.

Why Invest in a Home Inspection

While home inspections might not be the most exciting part of your home buying journey, they are extremely important and can save you money and a major headache in the long run.

In a competitive housing market, there can sometimes be pressure to make an offer right away without conditions. However, no matter how competitive a market may be, you should never skip out on things designed for buyer protection - such as a home inspection.

You may have a good eye for décor and love the layout of your potential new home, but what is under the surface is typically where headaches can lie. We have all heard the expression “don’t judge a book by its cover” so why would you make the most important purchase in your life without checking it out?

In fact, there are five reasons that a home inspection might just be the best $300-$500 you ever spend:

It Provides an “Out”

When buying a new house, it is always best to avoid taking chances. While a house may look great on the surface, hidden structural issues such as cracked foundation or roof damage can easily turn into expensive repairs. A home inspection can help reveal any large and/or hidden issues, which can often provide an ‘out’ for the buyer. If you find something that will cost a considerable amount to replace or repair you can go back to the seller’s agent and ask for a reduction in the price. A leaky roof may cost a few thousand to replace. Perhaps the seller would split the cost with you? It’s worth asking. If the price cannot be re-negotiated if issues come to light, then it is best to just walk away on the basis that the home will cost you too much in the long run.

Confirms Safety and Structural Integrity

Another benefit of having a home inspection is not only to find issues, but also to confirm structural integrity. During an inspection, the inspector will review everything from the attic to the furthest reaches of the basement and will look for things like mold, holes in the chimney, saggy beams or improper wiring.

Reveal Illegal Additions or Installations

Similarly to determining any safety and structural issues, home inspections can also reveal hidden additions or DIY installations that may cause trouble down the road. If the seller wired the house improperly or used substandard materials, it not only could cost you big in the future but it could even null and void your home insurance should something happen!

Forecast Future Costs

A home is an ongoing expense, much like a car. Unless it is brand new, there will be regular maintenance and updates required to replace things when they become old and inefficient. For instance, water heaters typically last for 6-10 years, the life of a good roof is around 20 years, while furnaces can last up to 25 years. The home inspection report will include an estimate on the remaining life for each of these big-ticket items, which will give you a heads up on future expected costs and provide you time to save for their eventual replacement.

Peace of Mind

Finally and perhaps most importantly, getting a home inspection is important for your own peace of mind. A home is a huge investment, and one that you will be paying off for 20 or 30 years. It is much easier to feel good about your investment after you have gone through a home inspection and you know that the house is safe and that you won’t run into any surprise problems down the road. While a home inspection isn’t free, peace of mind is priceless and a few hundred bucks is worth it!

If you’re not sure how to get started with your home inspection, please don’t hesitate to reach out to me directly for some help or a few referrals!

Fall Home Tips

Inspect Your Gutters

This time of year it is important to clean and inspect your gutters (replacing as needed) to ensure they are working properly as the rain and snow season hits. If they are clogged or damaged, it could result in a flooded interior and damaged exterior so don’t wait!

Check for Drafts

In the Fall and Winter, many homeowners are spending extra money heating their homes due to drafts, but it doesn’t have to be that way! Do a check on all exterior doors and windows to confirm if they are properly sealed. To do this, simply close a door or window on a strip of paper. If the paper slides easily, you need to update your weatherstripping.

Have Your Furnace Inspected

In Canada we are no strangers to chilly evenings! To ensure you are comfortable throughout the colder months, be sure to have your furnace inspected by an HVAC professional. They can check leaks, test efficiency, and change the filter. They can also conduct a carbon monoxide check to ensure air safety.

Fix Any Concrete/Asphalt Cracks

This one is easy to ignore thinking it will be fine, but it could easily turn into a bigger issue. When water gets into existing cracks during the colder months it will freeze and expand, causing the crack to become even larger.

Turn Off Outdoor Plumbing

Since your garden will not need attention until the Spring, it is a good idea to shut off and drain all outdoor faucets and sprinkler systems. Depending on where you live, you might also want to cover them to prevent freezing during the Winter months.

Change Your Batteries

It is a good idea annually to check that all smoke detectors and carbon monoxide devices are working. While you’re doing your Fall and Winter home preparations, this is a good time to test your existing gadgets.

5 Approval Roadblocks You Should Know

September 17, 2021 By Administrator

5 Approval Roadblocks You Should Know

When buying a home, there is nothing worse than having your mortgage broker or lawyer call and say “there is a problem”. If you have found your dream home and negotiated a fair price, and you have supplied all the documentation to your broker, you probably assume everything is fine.

The reality is that your financing approval is based on the information the lender was provided at the time of the application. If there have been any changes to your financial situation, the lender is within their rights to cancel your mortgage approval. To ensure that you don’t encounter any last-minute roadblocks on your home buying journey, there are five major things you must avoid for a smooth transaction:

1. Changes to Your Employment

When submitting a request for financing, whether for a mortgage or car loan or to handle personal debt, one of the most important aspects the lender looks at is employment. If you were working at Company X for five years at $80,000 a year and change jobs before your upcoming mortgage is finalized, the lender will require proof from your new employer. If you change industries, they will need more proof that you are capable of keeping the job. Plus, for employment involving overtime or bonuses, the lender often requests a two-year average, which is not possible from a new position. Another employment change that could hurt your financing approval would be moving from an employee to a self-employed contractor. A good rule of thumb is to wait to make any major employment or life changes until after the deal has gone through.

2. Down Payment Source

As mortgage financing is based on the initial information provided, you will most likely need to do a final verification of the down payment source. If it is different from what the lender has approved, it could spell trouble for your financing approval. Even if you said that your down payment was coming from savings and, at the last minute, mom and dad offer you the funds as a gift, it could affect your approval. This is an acceptable source of down payment, but only if the lender knows about it in advance and has included this in their risk assessment.

3. Existing Debt

A week or two before your possession date, the lender will obtain a copy of your credit report and look for any changes to your debt load. Since mortgage approval is based on how much you owed on that particular date, it is important not to increase your debt before the deal is finalized. Buying a new car or items for the new home must be postponed until after possession; even if they are “do not pay for 12 months” campaigns because you will need to fulfil those payments, regardless of when they start.

4. Bad Credit

One of the biggest roadblocks to mortgage approvals is credit card payments. When you are in the process of getting financing or waiting to take possession of your home, it is important that your credit score remains positive. If your credit score falls due to late payments, this can cause major issues with your financing. Even if you have a high ratio mortgage in place which requires CMHC insurance, a lower credit score could mean a withdrawal of the insurance and removal of any financing approval.

5. Missing Identity Documents

Before a mortgage is finalized, the lawyer is required to verify your identity documents and see that they match the mortgage documents therefore it is important to use your legal name when you apply for a mortgage. Even if you go by your middle name or a nickname, all legal documents should match.

To help avoid last minute roadblocks and catastrophes with your mortgage application, be sure to keep in touch with me at all times during the mortgage process. If there are any changes from your initial mortgage application, it is important to advise them well in advance and to run those changes by myself to ensure they will not affect your application.

Finding Your Perfect Home Type

When it comes to finding your perfect home, there are so many more options for potential homeowners! From a single-family dwelling to a townhouse to a modular home, the choices are seemingly endless. Before you start widening your search, let’s take a look at what makes these home types different - and which one is perfect for you!

Single-Family Detached:

This is a stand-alone house that sits on its own lot and is the most common type of home. As these are detached dwellings, they provide more privacy with less noise from neighbours. They also tend to be larger dwellings (complete with a yard!) which gives you the space and freedom to really make it your own.

Single-Family, Semi-Detached:

These homes are suitable for a single family and are typically attached to another house on one side. Semi-detached homes are often more affordable to both buy and maintain. With this affordability does come somewhat less privacy and protection from noise due to the shared walls on one side.

Duplex:

These structures contain two single-family units on separate levels and are great options for individuals looking to reduce home purchase and carrying costs - live in one unit, rent the second! This type of home also provides unique flexibility for older families, giving you the option to move adult children or aging parents into the second unit as needed. As expected, these units offer less privacy than single-dwelling homes and can sometimes have increased noise through the floor or ceiling.

Townhouse or Row House:

These are a row of single-family homes, which are connected on both sides to the next home (excluding the end unit, which is only connected on one side). Townhouses typically have private yards but, in some cases, it may be freehold or condo-style with shared ownership rights and responsibilities. However, these homes are typically more affordable and easier to maintain, though you may have to consider strata or maintenance fees. Similarly to duplexes, these home types have less privacy and may have noise from shared walls.

Condominium:

These are low- or high-rise buildings containing multiple apartment units. Condos are excellent starter homes for single adults, or couples, as they are affordable and require minimal maintenance. Some buildings even have shared amenities, such as a fitness center or swimming pool or party room. QUICK TIP: Always check for these amenities and if you would be interested in using them. If not, why pay for them? In this case, you might be better off finding a condo with less amenities and lower strata fees.

Modular or Mobile Home:

Growing in popularity are modular homes, which are prefabricated homes delivered to a home-site for installation. These homes are owned by the individual, while the land it sits on could be rented or owned outright. These types of homes are highly affordable and extremely flexible; if you relocate, you can sell the mobile home with the property or keep the home and relocate it! If renting land in a mobile home community, there are also those costs to consider.

Carriage House or Urban Infill:

A carriage house is located on the periphery of a single-family detached house. Similarly, are urban infill homes which are a modern solution to crowded cities. These homes are often located in interesting, urban environments and have their own character. They are also generally less expensive, but there is potential for noise pollution if you are in a busy location. Due to the size, there is also limited inventory and limited or non-existent yard space. But if you’re looking for something affordable and unique, these are a great option!

Finding the right home to suit your needs means considering your lifestyle and budget now, as well as where you’ll be a few years down the road. Want more information or need help deciding the best option for you? Contact me today to learn more about your options when it comes to buying and owning a home.

How to Talk to Your Kids about Finances

A vast majority of parents are currently supporting their children (ages 18-35 years) financially, spending an average of $5,623 per year! This is an extensive additional cost that most parents cannot afford. In fact, over 30% of parents are seeing delayed retirement in order to help kids with post-secondary costs and are facing an inability or delayed timeframe in paying off their own debts.

As much as parents want to help their kids, it should not be done at the jeopardy of your own future. In fact, when it comes to teaching your children about money, there is no better time to start than now!

Financial independence is a critical skill for future success that your children will not learn anywhere else. Not only does financial literacy help your children have more success in life, but it allows them to move out sooner and it avoids delaying retirement! So, how do you teach your children about money?

Review Your Attitude Towards Money:

The first and most important thing is to examine your own attitude towards money. Are you a penny pincher? Frivolous spender? Do you buy on impulse, or take a long time to make a purchase? How much debt do you have? Your financial habits will shape your children’s. To ensure that you are setting them up for their best financial future, parents need to consider what messages they are sending with their own money habits.

Give Your Children an Allowance:

Providing an allowance to your children (especially one exchange for chores) is an age-old way of teaching your kids about money. A good guideline is $0.50 to $1.00 per year of your child’s age. For a 10-year-old, this would be $5 to $10 per week.

Teach Your Child to Save:

If you are giving your child $10 per week in allowance for chores, encourage them to put even just $0.50 per week into a piggy bank. In six months, show them how much money they have saved and talk to them about why it is important, and what they can do with that larger amount now.

Encourage Kids to Think Before They Buy:

While it’s hard to get a 10-year-old excited about an RRSP, there are other ways to help them plan ahead. One is to encourage them to think about their purchases before they commit. They saw a toy on TV they have to have? Teach them about how advertisements are designed to make you want something. Ask them to wait a week. Do they still want it?

Involve Your Children in the Family Finances:

It is more valuable than you might think to let your kids see and hear you discuss financial planning; let them be part of opening and paying bills or planning vacations. Explain why you pay certain things and discuss affordable choices. This helps them be part of the conversation and will work to instill a sense of financial responsibility as they grow up.

Remember, you are the best example to your children about money. Don’t be afraid to share the ups and downs with them. Be patient with your kids, but don’t give up! The best thing you can do as a parent is to promote financial security and independence.

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