Why are some homes hard to insure?

When you're buying a home there can be a lot of details that need attending to in a short period of time. One of those details is arranging for the insurance on your new home and its contents. Mortgage finance companies will insist on proof that you have home insurance in place prior to advancing the funds for your closing. They want to ensure that your investment is protected and without insurance, you may not get a mortgage. This is an awful and potentially costly outcome to deal with at the last minute, so you may want to do some work in advance.

Start out by checking with your lawyer about the existing home insurance on the property. Typically, the home insurance on the property will be cancelled on the possession date, and it's your responsibility to arrange for a new insurance policy. Your lawyer can confirm that this is the case, and that no insurance policy is transferring to you upon closing. Carrying over the home insurance on an older property can be beneficial to you should you have trouble insuring your home, however, if you choose to find a new insurance policy you want to make sure that you won’t be billed for any policy already in existence on the property.

Buyers these days have found that some homes are difficult or expensive to insure due to old or dangerous electrical wiring, older oil tanks and furnaces, and even old roofing. There are many ways to deal with these issues other than spending big money to update, such as getting a qualified electrician to test the wiring. Once deemed to be safe, the house will be insurable. Likewise, testing of older oil tanks and furnaces by your local fuel company will also satisfy many insurance companies and homeowners alike of the safety of the home.

A condition on the home’s insurability that protects the buyer is a good thing to consider for your next purchase. However, not every situation is ideal for conditional offers, and your realtor will be able to advise you on this. Be sure to understand fully the risks of eliminating this clause in your Agreement of Purchase and Sale before you proceed.

How can you be sure that you're getting good value for your money? Leave yourself some time to investigate different alternatives. When comparing one company's quote against another, make sure that you are comparing apples to apples. There are a lot of variables that you should understand and consider when evaluating pricing, such as what is the deductible amount that you must pay before the insurance kicks in, and what the maximum replacement value of the house, the garage, and the home's contents is. How much is allowed for living expenses if you have to live outside the home while repairs are being made? What are the policy's exclusions? Take advantage of the telephone help lines with live operators that many insurance companies have set up to help you understand the fine print in the policies.          

Welcome Entrance Halls that Sell Your Home

Everybody knows first impressions count a lot! Your front hall or entranceway is the first thing house-hunters see.
A well-planned entrance hall is as welcome as a warm and sincere smile. You notice it immediately and the instant message stays with you long after you have moved on. The size of a front hall will vary considerably depending on the layout of your home, but no matter how diminutive or grand, make it memorable.
Tidy and organized
The hall is a very busy area with many roles to fulfill -- a place to put outerwear, stash keys, pick up mail, and check your appearance. Plan for these jobs and you'll be able to control the traffic flow. If it requires too much time and effort to find a spare coat hook, or there's no room for boots, chaos is imminent. And that's a turn-off for any prospective home buyer. Take stock of what you need to remedy the situation and build it in.

• Canada has four seasons, and they all call for some kind of outerwear. If there is no front hall cupboard, purchase an armoire. You don't have to spend much and you can paint it to blend in with your décor. Coat hooks and coat racks get overloaded and messy quickly -- not a good permanent arrangement. However, they are a handy solution when you have extra company.     
• Think about setting up a boot and shoe rack on a rubber mat. Make it multi-layered: wet boots raised slightly along the bottom rack, inside shoes or slippers, on a shelf above. Remember: if it's effortless it will happen.
• A console table (a half table that fits against the wall) takes little space and is the perfect place for keys and mail. Place one or two attractive trays or baskets on top to contain the clutter.     
• If you have no room for a table, design a wall organizer with a few slots for mail, hooks for keys and a spot to clip up messages.

Decorate with care
The entranceway is the first space you see, a harbinger of what is to come. Let your home's style and character shine from the moment you enter.

Choose a colour that is picked up in other rooms which can be seen from the hall. This will draw the eye into your home.    

If your entrance hall sits open to the living area, you may want to apply the same wall colour throughout. But you can make the hallway feel more welcoming with a few special touches. Choose a slightly different shade or a different sheen of paint for the hall walls. Higher gloss paint is easier to maintain, which is worth considering in a busy passageway.    

Make a feature of the hall ceiling. Paint a blue sky and some fluffy white clouds, and hang a chandelier that draws the eye up.  

A mirror by the door is a small but essential feature. You'll find frames for every style from formal to funky.   

There may be little room for furniture, but a small seat or table should be of good quality. It's a great opportunity to fit in a personality piece you've unearthed at a yard sale.  
Floor flair
The hall is generally not too big so you may want to splurge a little on the floor material. Marble and slate are elegant and timeless, hardwood is formal, and pine is country casual. Linoleum and good quality vinyl are both practical and durable. With today's wide choices in colours and patterns, you can find the perfect fit for your style.
A small welcome mat or floorcloth by the door should be decorative as well as practical. You can make a modern version of the traditional canvas floorcloth with sheet vinyl. The vinyl will lie flat and is softer underfoot than canvas. Paint a design on the reverse side of a piece of paper-backed vinyl cut to your dimensions. Finish with four to six coats of varnish to seal and protect the surface.

What Buyers Are Looking For in a Home

Apart from a gorgeous place on a great street, that is. Here's what's getting the attention from potential buyers these days.

1. Energy efficiency features With fossil fuel prices headed skyward, buyers now want homes that will save them money on energy bills every day. An Oraclepoll Research survey of Ontarians in January 2006 found that energy efficiency was the most important feature to home buyers after price and location. Think beyond programmable thermostats and Energy Star appliances: buyers are getting excited about unsexy features like heat recovery ventilators, ground source heat pumps, tankless water heaters, solar panels, and low-emissivity, argon-filled windows.
   
2. Luxurious Bathrooms
   Coveted bathroom features include: whirlpool tubs, separate shower enclosures, multiple showerheads, generous linen closets, dressing areas, and double sinks. Buyers also expect multiple bathrooms, and Jack-and-Jill bathrooms are popular with families.
   
3. Built-in closet organization systems
   Whether your closets are massive or minute, make the most of them with built-in organization systems. Several companies offer many different closet systems, allowing you to customize your closets. For maximum return on investment, plan flexibility into the design. Buyers will want to configure their own storage areas.
   
4. Specialty rooms
   The living room is practically passé, but mention a well-outfitted media room/home theatre and buyers' wallets start to pop open. Exercise rooms are also a trendy feature. And in certain neighbourhoods, a dedicated yoga/meditation space could seal the deal.
   
5. Environmentally friendly finishes and materials
   Hardwood floors are perennially popular, but some buyers prefer eco-friendly alternatives to traditional hardwoods. Bamboo is one of the trendiest new flooring options, because it's considered a renewable and sustainable resource. Cork and natural linoleum are also appealing, and heritage hardwood reclaimed from old buildings offers both patina and eco-panache.
   
   Likewise, concerns about both health and the environment are leading lots of buyers to look for homes decorated with natural, environmentally responsible materials and finishes. Paints that are low in VOCs (volatile organic compounds) are a healthier alternative to conventional paints, which release toxic emissions for years. Window coverings made of cotton, hemp, linen, wood or other natural materials are preferable to petrochemical products. Avoid installing anything made of particleboard.
   
6. Wired home
   Each year there are more techno-gadgets and appliances we just can't live without. Buyers expect a house to have plenty of well-located phone jacks, electrical outlets, and cable/internet connections. We want flexibility and portability, so a house that's wired for maximum connectivity is a hot property.
   
7. Luxe touches
   Glass tiles, upgraded cabinet hardware, solid-surface kitchen and bathroom countertops, classy lighting, and upgraded fixtures will make buyers look twice. Luxurious materials and fittings need not break the bank: shop carefully and install them where they'll have the most impact.
   
8. Spacious, stylish utility rooms
   Having a beautifully organized and attractively decorated laundry centre—preferably not in the basement—is becoming more and more common. Laundry centres lend themselves to multiple purposes, serving as mud rooms, craft/sewing areas, and/or gift wrapping stations. A flexible, cleverly outfitted laundry centre can be a real selling point. Bright, oversized garages and well-designed walk-in pantries are also in great demand.
   
9. High-end finishes for appliances
   While white is still the most common appliance colour, stainless steel appliances are very popular. Stainless steel works with a variety of décor styles and wood finishes, and fingerprint-proof finishes impress buyers. Manufacturers are introducing other high-end finishes for appliances: brushed aluminium, oiled bronze, and gold and silver metallic’s that suggest sleek automotive finishes.
   
10. Pre-listing home inspection
    Arranging for a home inspection prior to listing makes your home more appealing in several ways. You can show buyers you've addressed any defects the inspector found, and add weight to your disclosure statement. A pre-listing inspection suggests you have little to hide, alleviating buyers' concerns and suspicions. It may even encourage them to waive the inspection condition in an offer. Finally, it should help you price your home more realistically, which always attracts buyers.

Banking Definitions: Types of Mortgages and the Steps to Obtaining One

A house is probably the single biggest investment one will ever make and almost everyone who is buying a home will need some sort of financing. Most simply put, a mortgage is a loan that uses a property as security to ensure the debt is repaid. A mortgage is a fully secured form of financing where the interest you pay is often less than other forms of unsecured financing like a credit card.

So what does one look for in a mortgage? Seek out a mortgage that best suits your personal situation and strategize to pay the least amount of interest over the term of the mortgage. Before you can buy a home its best to do some research and follow these simple steps when seeking financing:

1. Get your finances in order.

2. Your credit rating is an intrinsic part of getting a mortgage. We advise you to engage a mortgage broker.

3. Know what you can afford.

Although it can be depressing when you compare your income to your expenses, it will be even more depressing if you can’t make the mortgage payments on your new home! When assessing the amount and type of mortgage you are eligible for, your lender will take into consideration only the debts you have to pay. Therefore, it’s up to you to create a realistic monthly budget for you to assess where and how you spend your money, and what you can actually afford, because the bank won’t.

Once you deduct your total monthly expenses from your total net monthly income, the remaining amount is what you can afford to pay each month toward your mortgage payments -- and in that amount you need to include a contingency buffer for taxes, emergency repairs and other costly items that could manifest.

Before you can even consider mortgage costs you need to determine how much of a down payment you have to purchase a property. Your down payment is your initial amount of equity that you are putting into the purchase. The balance of the purchase price is what will be financed through your mortgage.

Currently in Canada, a down payment of 5% is the minimum amount required for the purchase of a primary residence. However, a buyer must set aside more money for closing costs. Learn more about the costs associated with buying a home.    

The Home Buyer’s Plan (HBP) and First Time Buyers

The Home Buyers' Plan (HBP) is a Federal Program in Canada that allows you to withdraw up to $25,000 from your registered retirement savings plan (RRSP) to buy or build a qualifying home for yourself or for a related person with a disability.

Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the HBP.

Generally, you have to repay all withdrawals to your RRSP within a period of no more than 15 years. You will have to repay an amount to your RRSP each year until your HBP balance is zero. If you do not repay the amount due for a year, it will be taxed with your income for that year.

Determine What Size of Mortgage You Can Carry

What can you comfortably afford? What amount can you financially stretch yourself to in order to buy your dream home? Often lenders will be more than happy to lend you more and give you a larger mortgage if you can afford the payments, but you need to decide whether or not you want to be saddled with a large mortgage. Will the larger monthly payments fit comfortably into your budget? Will it change your lifestyle? Is it worth being house-rich and pocket-poor?

Getting Ahead with a Pre-Approved Mortgage
The process to getting a pre-approved mortgage is quick, simple and it doesn’t cost you a thing! It can save you time and heartbreak and your offer will be taken more seriously by sellers. That being said, just because you are pre-approved, doesn’t mean you have secured a mortgage. You still need to be approved by your lender so any offer you make should be “subject to financing.”

And understand that in today’s climate of rapidly changing interest rates and qualification requirements you need to keep in touch with your lender. What was approved two months ago may not be applicable when you need it to be.

Know the Lingo

Mortgages break down into two types based on the amount of the down payment, and the amount of risk the lender is taking by providing you the loan.

Fixed Rate Mortgage This is a mortgage that has a fixed interest rate for the entire term of the loan. The distinguishing factor of a fixed-rate mortgage is that the interest rate over the time period of the mortgage is set at the time the mortgage is originated. The benefit of a fixed-rate mortgage is that the homeowner will not have to contend with varying loan payment amounts that fluctuate with interest rate movements.

High Ratio Mortgage If the down payment is less than 20% of the purchase price of the home you want to buy, you are also required to be insured by the Canadian Mortgage and Housing Corporation (CMHC) or by one of several other private insurers that operate in Canada. Talk to your mortgage broker, as the premium cost can be quite steep.

Variable Rate Mortgage A variable rate mortgage is a mortgage that has fixed payments, but the interest rate fluctuates with any changes in interest rates. If interest rates go down, more of the payment goes to principal and if interest rates go up, more of the payment goes towards the interest.

Amortization The repayment of a loan calculated so that the principal will be paid in full through monthly payments of principal and interest for a predetermined period of time. Many home mortgages are fully amortized in 15, 20 or 30 years. This is different from the mortgage “term.” For instance, you could have a fixed term mortgage with a five-year term, based on a 30-year amortization.

Open Mortgages Mortgages where you can pay it off in full or in part at any time without being penalized. By paying down your principal early, you can save a lot of money in interest. This is why the average fixed interest rate for an open mortgage is often 0.4-0.6% higher (or more) than a closed mortgage for the same term.

Closed Mortgages This is the opposite of an open mortgage -- you cannot pay off the mortgage before the maturity date, refinance, or re-negotiate the interest rate or term without being penalized. However, many closed mortgages allow you to double your payments or pay additional lump-sums at varying intervals -- depending on your lender's terms. Worth enquiring about.

The most important advice we can give is for you to always read the fine print and consult with your agent and lawyer before signing on the dotted line and accepting any mortgage seller’s offer.

The Friendly Suburbs

Whenever you move, be it to a new city, or an entirely different country – expect there to be a bit of culture shock. What may be considered polite in one area may be considered rude in another, the food may be different, the clothing may be different as well. But there’s a certain shock to the system that many people have when they move to the suburbs from the city. Why are all these people smiling?
Yes, welcome to the happy environs of the suburbs. Maybe it’s the extra space, the fresh air, the abundance of parks, and schools that are less crowded. It could be that many suburbs these days are for all intents and purposes “free standing” – with all the shops, restaurants and jobs right there. No need to fight your way in to the city. But whatever the reason, many people will tell you that the atmosphere in the suburbs is just that much friendlier.
Now that’s not reason alone to move to the suburbs. But it can have a serious impact on your future, and the future of your children. Schools in the suburbs tend to be much less crowded, and parents are very involved in the day to day of what happens in their school district. If you’re new to a community, getting involved on this level is a great way to meet new friends and develop a social network. You may also be surprised at the cultural diversity that you will find in the suburban schools. Your children will meet other children from countries all around the world – a obviously it’s a great plus for youngsters to be exposed to a variety of cultures. This diversity can actually help children make friends, - in an environment where differences are embraced, tolerance of others because the norm.
Typically suburbs are less crowded, with less traffic, and the concerns of the city, such as crime rates, tend to not be as worrisome. You are definitely more likely to see children playing hockey in the streets, or basketball in the driveway – if for no other reason that there is a driveway to play in, and those streets are significantly quieter! You are more likely to see kids walking to school in groups than you might in the city. And those suburban schools often have more resources than their crowded city counterparts. On top of that, the cost of property per square foot is often considerably less than what you pay in the city, and that means that your children will have more space in your home for friends to come over, and for adult entertaining as well.
The adults in the family will appreciate the great resources that the suburbs have to offer, from community centers and book clubs, to local gyms and even senior care homes. Of course, all these activities are available in the city as well. The difference is the accessibility. If you are new to a country, or to a style of living, this access can mean the difference between finding your footing in a new situation, or feeling isolated and alone.
I’m certainly not saying that cities aren’t nice places, - but lets face it – the hustle and bustle, the smaller homes squished in side by side, busy streets not conducive to children playing, - can cause some distance between people. You may never really know your neighbours. You may not feel comfortable letting your kids play outside unsupervised. Everyone is in a rush. If this is what you are used to, the slower pace and more relaxed vibe of the suburbs can come as a bit of a shock. But don’t let that be a negative. When given the opportunity to live with your family in an area that is affordable, with good schools, great amenities and shopping, diversity, and most of all, a friendly neighbourhood atmosphere – who wouldn’t want to give that a try?
So, if you are thinking of making a move outside of the city, take a drive one day to the suburb of your choice. Check out the various neighbourhoods, and notice the home owners mowing their lawns, and children on their bikes. Enjoy the parks, see the shopping areas, and take a peek at the schools. Walk around a bit and enjoy what you see. While you’re at it, see how many people smile at you

Renovating Before Selling—Is It Worth It?

Does your home and current market conditions warrant a home renovation before you sell? Here are some things to consider before you start that large reno job.
Every day a homeowner asks the question, "should we renovate and sell or sell this home as it is?" And every day a homeowner gets the renovation bug and spends thousands of dollars on their aging home only to find that they really made no profit on the work after selling.
Do-it-yourself and home renovation is an extremely enormous market. And with all the inspiring shows we see on television each day, it is hard not to get the bug! Absolutely everything we need is available at the local hardware outlet - some of them even offer free reno classes.
All that is missing is experience. The experience required to select professional materials and not just buying what is presented in the sale catalogue; the experience to handle the difficulties of the job, to prepare the many different types of surfaces that people are confronted with, and the experience to know what can and cannot be achieved without specialised tools or without time to cure products or allow them to settle so that inherent problems do not affect how the finish performs over time.
So what do you do if selling the home is intentional and a profit essential? You need to do a serious market survey and compare your home with what is in your street and area and what they had that you don’t. If you are the best home in your street, then you have already hit the top of your market and it will be hard to predict what you will get. In this situation you need to find a buyer who is simply as passionate about your home as you are, and hope that an emotional bid may allow your home to hold the new highest street price as a future comparative yard stick for others.
At the same time, a professional finish can be achieved with a very minor budget. It would be very worth bringing in a professional painter and painting the home in soft colours that provide a warm or cool contrast but do not dominate the colours within your rooms. Another low budget recommendation is to invest your budget in hiring new, fresh furniture for the auction or sale period, so that the furnishings are not tired and worn and can actually modernise the feel of the home.
In closing, your best bet is to have a serious chat with agents or the right people for advice on what is an acceptable limit for your renovation work given the area you live in. Remember, everyone out there wants to purchase a bargain. And they all hold the same opinion about freshly renovated homes; that have already been purchased and redone by someone else in order to make the profit they may be looking to make also. Why not give your next buyer a home worth renovating! It might be just the thing that attracts them to it.

Top 10 Splurges That Add Value to your Home

Everyone is looking to save a buck, but scrimping isn’t always best when renovating. Investing money in your home is smart so we’ve highlighted 10 key splurges that may actually add value and end up saving you money.

1. Energy efficient appliances are a great investment. You may be spending more up front but the amount spent will be reimbursed in no time. Plus, if reselling your home, home buyers usually attribute a higher value to the machines than they actually cost.
   
2. Hardwood flooring boosts the value of your home the minute someone steps foot on it. There is an endless selection of woods and stains that complement a variety of design styles. Finding the right one is as easy as walking into any flooring store and choosing your favourite one!
   
3. Installing solar energy alternatives add more than just monetary value to your home. Using solar panels or solar water heaters are quickly becoming popular, especially in our new money-strapped, green-conscious world. These options are initially expensive but will pay off in the long run and reduce your carbon footprint vastly.
   
4. Honeycomb blinds are stylish and energy-saving. These window coverings blend in easily with any decor and work to keep your house cooler in the summer and warmer in the winter.
   
5. Choosing an investment furniture piece is essential. Decide on the area that is the most important to you. A custom created couch or a much-desired dining room set can up your style quotient instantly.
   
6. Splurging on a new air-conditioner or furnace may not sound like fun, but updating these units is important. Old furnaces have a shelf life of about 15 to 17 years, so if yours is approaching retirement age, start looking now. A complete HVAC system improves not only cost and energy efficiency, but it also improves your home’s air quality with HEPA air filters, electronic air cleaners or humidifiers. With this purchase you’ll be breathing easy.
   
7. Putting a roof over your head doesn’t have to be boring. Picking the right roof tiles updates the exterior of your home immediately. Whether it’s classic cedar shake or sophisticated slate, a new roof will add instant curb appeal.
8. A kitchen update is a homeowner’s dream. When splurging on your home, going custom is the only way. Kitchen specialists offer in-home consultations that help you decide how you can use your kitchen more effectively, eliminating bothersome buyer’s remorse after an ill-designed layout.
   
9. While investing in your kitchen, go the extra mile to include high-end appliances. A sub-zero refrigerator, professional grade oven and cook top or even an under-counter wine fridge will shine and impress visitors.
   
10. Ready to make a splash? Use that extra money to have some fun in the backyard! Installing a pool gives family and friends a great place to chill during warm summer months. And solar heating units extend the life of your pool into the late spring and early fall as well. While you’re at it, buy a fabulous outdoor living set perfect for quiet summer nights or vibrant backyard parties.