If you don’t have enough money for a 20% down payment on your house purchase, your lender will require that you seek “mortgage loan insurance” through the Canada Mortgage and Housing Corporation (CMHC). This program costs you a bit extra, but it might make it possible for you to get the financing you need. You may also qualify for a program at CMHC called “purchase plus improvements.” It allows you to add the cost of renovations into the purchase price of the home—and use the higher post-renovation value as the value by which to calculate the mortgage amount. This program is limited to renovations that are no more than 10% of the purchase price or current value. There are hoops to jump through with a program like this, but it’s well worth looking into.
Getting Real About Reno Costs
I hate to curb your enthusiasm for fixer-uppers, but you should know that the most expensive fix-it items to crop up may not even be obvious to you at first. Don’t fixate on ugly wallpaper or pink bathroom fixtures. In the grand scheme of renovations, those don’t add up to much because they’re just cosmetic. Remember that if it looks bad on the surface, what’s under the surface is probably far worse. And structural and mechanical systems will cost much more to repair or replace than you might think. The numbers might still work in your favour—but get estimates from reliable contractors and other specialists, and do your number-crunching using realistic figures.
Monday, April 29, 2013
Monday, April 22, 2013
The Nightmare Next Door
Their weeds are tall enough to get on the scary rides at the carnival. Their house is a retina-roasting goldenrod colour. They seem to throw loud parties on every day that ends in Y, and you're grateful if the worst things you find in your bushes are empty beer cans. Their renovation has been going on so long that you're beginning to forget you ever had a view of anything besides their dumpster. Maybe they just have so much junk strewn around outside that you can't tell if they're having a perpetual yard sale or evacuating.
Nightmare neighbours: if you're trying to move away from them, it can be difficult to convince anyone else to live near them. How are you supposed to sell your house when you've obviously got problem neighbours? No matter how delightful your home is, no matter how well it shows inside, potential buyers are probably going to notice the three rusty boat-tailed Buicks on the lawn two doors down.
The first course of action should always be to try to discuss the problem tactfully with your neighbours. Approach them with the benefit of the doubt: they probably don't realize how their behaviour is affecting you. Don't assume they are horrible, selfish people. Avoid speaking to them in a state of anger, if at all possible; this will only escalate any conflict. And don't make threats.
Explain that you are trying to sell your home and ask if you can discuss ways to make the sale go more smoothly. Be tactful, and have a few reasonable solutions ready for the problem(s) at hand. For instance, if their yard has been sorely neglected, and they're unable to do anything about it because they're dealing with serious illness or other problems, you might offer to pay for a lawn service to shape things up. No, it's not your responsibility, but it's a very small investment in getting your house sold.
If your neighbours are violating a bylaw, and you can't find a resolution by dealing with them directly, you can involve bylaw officers. They will investigate complaints and try to achieve voluntary compliance with local bylaws. Failing that, they have the power to issue tickets, order impoundments, and to initiate court proceedings. This can take some time, however, and if you're trying to sell your house, results may not occur quickly enough. If you can foresee selling your home, and think you'll need bylaw enforcement, contact officials as early as possible.
If the problem doesn't come under the purview of bylaws—for instance, it's a matter of aesthetics (the bungalow painted goldenrod, or the Christmas decorations that are merrily twinkling in August), you may not have much recourse. If your neighbourhood, development or building is governed by a homeowner's association, ask for their assistance. If you can't get cooperation from your neighbours on aesthetic issues, focus on protecting your view through the creative use of privacy fences, landscaping and window treatments.
Finding it impossible to come to a resolution with your neighbours? Consider mediation before pursuing legal action. A skilled mediator can help disputing parties find common ground and workable solutions they may not have discovered on their own. Mediators don't make decisions about who's right or wrong, but can help parties come to an agreement. And mediation is typically far more affordable than legal action. Many communities offer mediation services on a sliding scale or even free, through volunteer mediator programs, and they usually handle lots of "problem neighbour" cases.
As a last resort, you may have to call the police or take legal action. A lawsuit will typically take a fair bit of time and money, and police involvement usually sours relations permanently. These are desperate measures, but such action may allow you to get your house sold.
Finally, don't forget to spread good neighbour karma yourself.
Make the effort to welcome new neighbours with a friendly note or visit, and perhaps a modest housewarming gift such as a small houseplant or fresh baked goods. Such gestures can go a long way to establishing warm relations and smoothing over future difficulties.
Maintain your property's exterior. You don't have to hire a gardener, but keep the lawn trimmed, fix the shutter that's hanging at a 45-degree angle, and repair the roof before the shingles start hurling themselves to the ground. No matter how much you look at the outside of your house, your neighbours have to look at it more. Don't let it be an eyesore.
Be courteous: whether you are planning a big party, building a fence, removing a tree, or commencing major renovations, it's basic courtesy to inform your neighbours about the situation. This way, they can make plans to avoid the situation or offer input on how you can minimize the effect on them. Take responsibility for your actions: if building your deck means their car is covered in sawdust for weeks, you might give them some car wash coupons. If your new Doberman is terrorizing their tots, maybe you need to build a dog run.
Communication and courtesy are the keys to positive relations with your neighbours.
Nightmare neighbours: if you're trying to move away from them, it can be difficult to convince anyone else to live near them. How are you supposed to sell your house when you've obviously got problem neighbours? No matter how delightful your home is, no matter how well it shows inside, potential buyers are probably going to notice the three rusty boat-tailed Buicks on the lawn two doors down.
The first course of action should always be to try to discuss the problem tactfully with your neighbours. Approach them with the benefit of the doubt: they probably don't realize how their behaviour is affecting you. Don't assume they are horrible, selfish people. Avoid speaking to them in a state of anger, if at all possible; this will only escalate any conflict. And don't make threats.
Explain that you are trying to sell your home and ask if you can discuss ways to make the sale go more smoothly. Be tactful, and have a few reasonable solutions ready for the problem(s) at hand. For instance, if their yard has been sorely neglected, and they're unable to do anything about it because they're dealing with serious illness or other problems, you might offer to pay for a lawn service to shape things up. No, it's not your responsibility, but it's a very small investment in getting your house sold.
If your neighbours are violating a bylaw, and you can't find a resolution by dealing with them directly, you can involve bylaw officers. They will investigate complaints and try to achieve voluntary compliance with local bylaws. Failing that, they have the power to issue tickets, order impoundments, and to initiate court proceedings. This can take some time, however, and if you're trying to sell your house, results may not occur quickly enough. If you can foresee selling your home, and think you'll need bylaw enforcement, contact officials as early as possible.
If the problem doesn't come under the purview of bylaws—for instance, it's a matter of aesthetics (the bungalow painted goldenrod, or the Christmas decorations that are merrily twinkling in August), you may not have much recourse. If your neighbourhood, development or building is governed by a homeowner's association, ask for their assistance. If you can't get cooperation from your neighbours on aesthetic issues, focus on protecting your view through the creative use of privacy fences, landscaping and window treatments.
Finding it impossible to come to a resolution with your neighbours? Consider mediation before pursuing legal action. A skilled mediator can help disputing parties find common ground and workable solutions they may not have discovered on their own. Mediators don't make decisions about who's right or wrong, but can help parties come to an agreement. And mediation is typically far more affordable than legal action. Many communities offer mediation services on a sliding scale or even free, through volunteer mediator programs, and they usually handle lots of "problem neighbour" cases.
As a last resort, you may have to call the police or take legal action. A lawsuit will typically take a fair bit of time and money, and police involvement usually sours relations permanently. These are desperate measures, but such action may allow you to get your house sold.
Finally, don't forget to spread good neighbour karma yourself.
Make the effort to welcome new neighbours with a friendly note or visit, and perhaps a modest housewarming gift such as a small houseplant or fresh baked goods. Such gestures can go a long way to establishing warm relations and smoothing over future difficulties.
Maintain your property's exterior. You don't have to hire a gardener, but keep the lawn trimmed, fix the shutter that's hanging at a 45-degree angle, and repair the roof before the shingles start hurling themselves to the ground. No matter how much you look at the outside of your house, your neighbours have to look at it more. Don't let it be an eyesore.
Be courteous: whether you are planning a big party, building a fence, removing a tree, or commencing major renovations, it's basic courtesy to inform your neighbours about the situation. This way, they can make plans to avoid the situation or offer input on how you can minimize the effect on them. Take responsibility for your actions: if building your deck means their car is covered in sawdust for weeks, you might give them some car wash coupons. If your new Doberman is terrorizing their tots, maybe you need to build a dog run.
Communication and courtesy are the keys to positive relations with your neighbours.
Friday, April 19, 2013
How to Make a Smart Real Estate Purchase
We’ve all heard the horror stories – people paying way too much for a house, not getting an inspection and then finding a million (expensive) problems with the place. I’ve seen it countless times with homeowners on Income properties and from talking to eager real estate investors.
Here are my top five tips for making a smart real estate purchase so you don’t get burned!
Here are my top five tips for making a smart real estate purchase so you don’t get burned!
- Stick to Your Budget
It’s easy to get carried away here, especially if you make the mistake of looking at houses outside your price range. The important part is to have a plan. Don’t just think about your mortgage payments every month; also think about your monthly carrying cost and be honest about your lifestyle. Consider how much you spend every month on eating out, clothing, etc. There’s nothing worse than being house poor because you weren’t honest about your spending habits. - Don’t be Afraid to Walk Away
A house is an emotional purchase, since it’s where you’ll be living, raising your children and making a home for yourself. But it’s crucial to keep emotions out of the equation as much as possible. You should love your house, but you should love it because it’s in good condition and because the numbers work. Always get a home inspection and if you can’t afford it (or the work it requires), walk away! - Give Every House a Chance
I do most of my real estate browsing online, as do most people now, but you can’t always judge a house by the virtual tour – good or bad. If you see something online and it has bad pictures (or no pictures) but it’s in the right neighbourhood or in your price range, go look at it! Chances are you can get a good deal because so many people will skip it without photos online. - Think Long-Term
Before you jump into a real estate purchase, ask yourself: “What is the purpose of this property for the next 5-10 years?” Depending on your mortgage, you may have to lock in for a certain number of years, and if you think you’ll be moving in less than 5 years, I’d suggest looking at alternatives. You never want to be forced into selling your house. - Have a Support System
Having a real estate agent who understands your financial and personal situation is key, and great advice from a mortgage specialist and lawyer can be invaluable to the home-buying process. But what many people forget is to have a personal support system in place when they go house hunting. Advice from those close to you – family members, a partner, friends – is just as important to help keep you on track and avoid getting carried away. It’s easy to get caught up in the excitement of buying a house, so having the personal support will keep you grounded.
Monday, April 15, 2013
Choosing A Mortgage Broker vs. A Bank Loan Officer
Credit Rating
Before you buy a home it's best to do some research and get your finances in order. Your credit rating is an intrinsic part of getting a mortgage. Most prospective buyers often aren’t aware that in their effort to shop around and get the best deal, they can lessen their chances of even being approved. Each time your credit rating is pulled by a bank or a credit union, it is considered a credit application, regardless of whether or not you end up engaging that bank, and your credit rating is affected.
Mortgage Brokers
We advise you to engage a mortgage broker. Your mortgage broker will pull your credit history once and then use that one “pull” to market you to prospective lenders (major banks, credit unions, finance companies, private lenders and trust companies), so that you can get the best financing and terms to suit your needs.
A mortgage broker saves you time and energy and provides personalized service, sometimes with flexible hours. They offer specialized knowledge and will work hard on your behalf and do all the negotiating for you. They can help you improve your overall rating by advising you which credit cards to use and which to leave idle during the process. A mortgage broker costs you absolutely nothing because they are paid by lending institutions, not you.
Depending on your province, mortgage brokers must be licensed and are therefore subject to strict requirements. Accredited Mortgage Professionals (AMPs) must take on-going education courses in order to maintain their accreditation.
A mortgage broker will review your financial situation and discuss with you your future plans and risk tolerance, and help you choose the right type of mortgage for you. They will assess your situation and create different scenarios for you. They will tell you the maximum dollar amount you can consider paying for a house for the payments you can afford, and what your weekly, bi-weekly or monthly installments will look like. They can also assist you by creating a strategy so you can pay off your mortgage sooner.
You can often find a good mortgage broker via your real estate agent, who has a vested interest in their clients getting the best rates and terms.
Bank Loan Officers
The loan officers at a bank, credit union or other lending institution are employees who work to sell and process mortgages and other loans originated by their employer. They often have a wide variety of loans types to draw from, but all loans originate from their lending institution.
The loan officer will work within banking hours and he/she will take your application and try to find a home loan that suits your needs. If your personal credit is approved, the officer moves forward to process the purchase.
With a full range of personal banking solutions, your bank can help you reach all of your financial goals, from day-to-day banking to creating borrowing and investing strategies. Banks and credits unions may also offer bonuses like cash back, reduced fees or point program rewards for bundling your mortgage, credit card and bank accounts.
We advise you to do your research and find the best professional to help you achieve your goals.
Before you buy a home it's best to do some research and get your finances in order. Your credit rating is an intrinsic part of getting a mortgage. Most prospective buyers often aren’t aware that in their effort to shop around and get the best deal, they can lessen their chances of even being approved. Each time your credit rating is pulled by a bank or a credit union, it is considered a credit application, regardless of whether or not you end up engaging that bank, and your credit rating is affected.
Mortgage Brokers
We advise you to engage a mortgage broker. Your mortgage broker will pull your credit history once and then use that one “pull” to market you to prospective lenders (major banks, credit unions, finance companies, private lenders and trust companies), so that you can get the best financing and terms to suit your needs.
A mortgage broker saves you time and energy and provides personalized service, sometimes with flexible hours. They offer specialized knowledge and will work hard on your behalf and do all the negotiating for you. They can help you improve your overall rating by advising you which credit cards to use and which to leave idle during the process. A mortgage broker costs you absolutely nothing because they are paid by lending institutions, not you.
Depending on your province, mortgage brokers must be licensed and are therefore subject to strict requirements. Accredited Mortgage Professionals (AMPs) must take on-going education courses in order to maintain their accreditation.
A mortgage broker will review your financial situation and discuss with you your future plans and risk tolerance, and help you choose the right type of mortgage for you. They will assess your situation and create different scenarios for you. They will tell you the maximum dollar amount you can consider paying for a house for the payments you can afford, and what your weekly, bi-weekly or monthly installments will look like. They can also assist you by creating a strategy so you can pay off your mortgage sooner.
You can often find a good mortgage broker via your real estate agent, who has a vested interest in their clients getting the best rates and terms.
Bank Loan Officers
The loan officers at a bank, credit union or other lending institution are employees who work to sell and process mortgages and other loans originated by their employer. They often have a wide variety of loans types to draw from, but all loans originate from their lending institution.
The loan officer will work within banking hours and he/she will take your application and try to find a home loan that suits your needs. If your personal credit is approved, the officer moves forward to process the purchase.
With a full range of personal banking solutions, your bank can help you reach all of your financial goals, from day-to-day banking to creating borrowing and investing strategies. Banks and credits unions may also offer bonuses like cash back, reduced fees or point program rewards for bundling your mortgage, credit card and bank accounts.
We advise you to do your research and find the best professional to help you achieve your goals.
Monday, April 8, 2013
Freehold vs. Condo
Condos can be a great choice for many people, including first-time buyers looking to get into the market and build equity. A condo unit can be a good starting point since it is usually less expensive to own and carry than a traditional house. Condos can also be the right decision for people making their choice based on lifestyle. These buyers primarily choose this type of home because there is no yard work, snow removal or roofing repairs to be done, while others are looking for the extra security that comes with being high up in a secure building.
Whatever your reasons for considering a condo, it's important you start out by knowing what you're buying into. Some people don't have a clear understanding of what a condominium really is. They use the term “condo” as synonymous with “apartment,” however the term “condo” refers to the form of ownership and has nothing to do with the physical characteristics of the unit. In fact, a condo doesn't have to be an apartment at all. A condo can also be a townhouse, a link home, or any type of multi-unit residential dwelling or commercial property with shared areas. These areas, or common elements, can take the form of a swimming pool, rooftop lounge, exercise room, front lobby, parking garage etc. The cost of operating and maintaining these common areas is jointly shared by the individual unit owners in the form of maintenance fees that are usually paid monthly. The cost is determined by the condominium corporation which is made up of unit owners like you and since there is a certain degree of control over maintenance costs, I recommend getting on the board and becoming one of the decision makers.
Condominium ownership offers many advantages, such as the potential to build equity, title, and privacy within your unit. With a condo, you can count on the fact that your property is being well maintained with little effort on your part.
On the other hand, freehold units offer other advantages over the condominium option. You have more freedom to alter your property to suit your needs, and since you are responsible for upkeep, you have a bit more control over your maintenance costs. You can keep expenses down by cutting your own lawn and shoveling your own drive. You will have to budget accordingly for big expenses like a new roof or furnace.
Condos have rules and by-laws that govern such things as pets and what colour your neighbour can paint his garage, and by law a portion of the maintenance fee goes towards a reserve fund. Sometimes, the need for such rules, by-laws and a reserve fund become evident when the complex begins to age and can negatively affect resale values. There's a lot to consider when choosing a condo or freehold home; be sure to ask your realtor for help.
Whatever your reasons for considering a condo, it's important you start out by knowing what you're buying into. Some people don't have a clear understanding of what a condominium really is. They use the term “condo” as synonymous with “apartment,” however the term “condo” refers to the form of ownership and has nothing to do with the physical characteristics of the unit. In fact, a condo doesn't have to be an apartment at all. A condo can also be a townhouse, a link home, or any type of multi-unit residential dwelling or commercial property with shared areas. These areas, or common elements, can take the form of a swimming pool, rooftop lounge, exercise room, front lobby, parking garage etc. The cost of operating and maintaining these common areas is jointly shared by the individual unit owners in the form of maintenance fees that are usually paid monthly. The cost is determined by the condominium corporation which is made up of unit owners like you and since there is a certain degree of control over maintenance costs, I recommend getting on the board and becoming one of the decision makers.
Condominium ownership offers many advantages, such as the potential to build equity, title, and privacy within your unit. With a condo, you can count on the fact that your property is being well maintained with little effort on your part.
On the other hand, freehold units offer other advantages over the condominium option. You have more freedom to alter your property to suit your needs, and since you are responsible for upkeep, you have a bit more control over your maintenance costs. You can keep expenses down by cutting your own lawn and shoveling your own drive. You will have to budget accordingly for big expenses like a new roof or furnace.
Condos have rules and by-laws that govern such things as pets and what colour your neighbour can paint his garage, and by law a portion of the maintenance fee goes towards a reserve fund. Sometimes, the need for such rules, by-laws and a reserve fund become evident when the complex begins to age and can negatively affect resale values. There's a lot to consider when choosing a condo or freehold home; be sure to ask your realtor for help.
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