Getting your home ready to sell

The continuation of ultra-low mortgage rates in Canada has many buyers ready to upgrade their current homes for properties they can suddenly afford. However, in addition to home loans, the profits from selling a home are often essential in order to afford a new property. It’s with that in mind that Canadian homeowners should do everything in their power to make sure their current property is ready to sell.

Your home will be up against brand new properties competing for buyers’ attention. Keep that in mind when you begin getting ready to show it off. Walking through a new home lets buyers see it spotless and bare, allowing them to imagine what they could do with the space. While it’s usually impossible to make a home you’re currently living in look the same, there are things you can do to give it that feel. Firstly, get rid of the clutter. If your home is filled to bursting with possessions, invest in a storage unit. It’s hard for buyers to imagine themselves in your home if all your stuff is in the way. Next, make sure that your property is as clean as possible. Who wants a house with carpet stains and crayon drawings on the walls when there’s a pristine property available just down the road? Your home should be odor and garbage-free. Do everything in your power to make the space feel fresh. Continue reading

Programs for affordable housing

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Regardless of how low mortgage rates remain, buying a home is still a large financial responsibility. Between the expense of home loans and closing costs, not to mention renovation and maintenance, it’s important to make sure you’re taking advantage of every opportunity to save. Fortunately there are a number of programs geared toward helping Canadian home buyers find an affordable deal.These are not the only programs available to home buyers looking to save money, but they are some of the most popular. For Canadians looking to make the home buying process more affordable, the smart move would be to research all your options when it comes to qualifying for special programs and rebates. Finding one that suits your needs can result in significant savings.

Home Buyers’ Plan
The Home Buyers’ Plan allows Canadians buying their first home, people with disabilities, or people buying on behalf of someone with disabilities, to take money out of their registered retirement savings plans in order to buy or build a qualifying home. The amount that can be withdrawn goes up to $25,000 per calendar year. This program allows borrowers to take out the money without having to pay tax at the time. Typically, the money must be repaid over the course of no more than 15 years, with a certain amount repaid into the savings plan each year until the balance is zero. Continue reading

Understanding bridge loans

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Timing may be everything, but that doesn’t mean that it always adds up the way you want it to. For instance, maybe the closing date of a property you want to buy doesn’t match up with the closing date of your current property, meaning that temporarily, you’ll be the owner of two properties.

Or perhaps the money from the home you’re currently selling won’t be available to help pay for your new home in time, making it that much harder to transition from your old home to your new home.

It’s in situations like these that a bridge loan can become a vital part of the homebuying process.

What is a bridge loan?
If you’re buying a property before the sale of your existing home is finished, or before the money from your existing-home sale is available, bridge loans give you the opportunity to fund your down payment.

A home equity loan is often less expensive than a bridge loan, but many lenders will not make home equity loans available for homes still on the market. In addition, bridge loans contain certain benefits that may be a better fit for some borrowers. Continue reading

Understanding interest-only loans

With mortgage rates still hovering near historic lows, many prospective homebuyers will be looking to take advantage of the current market and save money on their home loans. While there are plenty of opportunities to make buying a home more affordable, it’s important to understand the pros and cons of all your options.

One alternative that buyers may be unfamiliar with are interest-only loans. These types of mortgages are very rare in Canada, but it is possible for prospective homeowners to use them.

What is an interest-only loan?
Interest-only mortgage loans require buyers to only pay off the interest that builds from the principal amount they borrow. Since borrowers are only paying off the interest on their loan, payments tend to be consistently low throughout the process.

Interest-only loans appeal to first-time homebuyers and other borrowers looking to defer large mortgage payments until they have more income. However, it’s important to remember that the entire mortgage will need to be paid off eventually. Making interest-only payments is a temporary arrangement, and at the end of the mortgage term, borrowers will have to decide how to pay off the remainder of their loan. Continue reading

What can real estate agents offer?

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Purchasing a home can feel overwhelming at times. Comparing mortgage rates, deciding whether to use a broker, filling out paperwork – sometimes prospective homeowners need a helping hand to smooth out the process.

While hiring a real estate agent to help with the buying process can cost extra money, the education and experience these market professionals offer can more than make up for any additional expenses. However, before you hire a real estate agent, it’s important to know exactly what they can do for you.

If you’re interested in a certain property, the right real estate agent will be able to tell you all about the neighborhood it’s located in. They should be able to provide you with data concerning crime, demographics, schools and anything else you might want to know about your future surroundings. Continue reading

Deciding on a home

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It’s no secret that Canada’s housing industry has become a buyer’s market. Prices are declining, homes are becoming more affordable and excess inventory has made it easier than ever for prospective homeowners to weigh their options when selecting a home. On top of all that, mortgage rates remain near historic lows, allowing buyers to finance their properties with very attractive interest rates.

In fact, according to Scotiabank, Canada’s current housing climate has created the perfect storm for prospective buyers. Lax home sales are making properties more affordable, but the industry has entered a soft landing, as opposed to a crash that would make buying a home a poor investment.

In a report from Scotiabank, economist Adrienne Warren predicts that while the market will remain soft in the short-term, prices will not be plunging to a dangerous degree. Continue reading

Cooling housing market creates opportunities for buyers

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While speculation regarding the cooldown in Canada’s housing market usually takes a negative spin, a report from the Royal Bank of Canada shows that falling home prices are opening the door to affordable housing for many prospective buyers.

Stricter regulations affect home prices
A report from the Teranet-National Bank shows that Canadian housing prices declined from September to October, marking the third time in 13 years of data that prices declined during this time of year.

Despite data from the bank’s national composite house price index showing that October house prices were up an average of 3.4 percent across the country compared to the same time last year, October also marked the 11th consecutive month of deceleration for year-over-year price increases. October experienced a 0.2 percent drop in average house prices from the previous month. Continue reading

Homes are more than just possessions for Canadians

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Most purchases are for transitory goods. Picking up the latest electronic toy might be fun, but in the end, it’s an ephemeral buy, something to be traded in as soon as a new upgrade is available. Buying a home, on the other hand, represents a much longer-term investment. A house is where you lay your head down at night, where you raise a family, where memories are created and shared. Of course, it’s also a more expensive purchase than your average phone or television. The point is, homes are more than just possessions, they’re investments.

According to a new poll from Scotiabank, most Canadians agree.

Data from the poll shows that 77 percent of Canadians view their homes as investments rather than expenses. When broken down by region, the number of homeowners who consider their houses investments is highest in Manitoba/Saskatchewan, Quebec and Alberta.

When you take this outlook into account, it’s easy to see why household debt continues to be a topic of contention across the country. If homebuyers see their purchases as investments for the future, chances are they won’t be turned off by incurring debt. Interestingly enough however, the Scotiabank poll also found that nearly half of Canadian homeowners have done away with mortgage debt. Continue reading

The ins and outs of home inspection

Imagine buying your dream home. It’s not cheap, but it’s worth it. You and your family will make it your own, spending many happy years living, laughing and making memories in it. Now imagine finding out that your beautiful new home is infested with mice. So infested, in fact, that you’ll now have to tear apart your million dollar investment. Sound crazy? That’s exactly what happened to a woman in Winnipeg, according to CBC News.

Connie Forsythe bought her $1 million home in September and began opening up walls to make renovations. It wasn’t long before she discovered that her 5,000-square-foot home already belonged to an immense nest of rodents. Now the home’s drywall, insulation and vapor barrier will have to be ripped out and replaced. Meanwhile, the previous owner denies having any knowledge of the infestation. Most likely, Forsythe will end up in court fighting for restitution.

Besides being the stuff of homebuyer nightmares, this story illustrates the importance of something that is often overlooked by househunters: home inspection. During the deluge of home loans and mortgage rates, common sense sometimes goes out the window. If you’re forking over hundreds of thousands of dollars for a place to lay your head down at night, the least you can do is make sure your new abode is clean, safe and structurally sound. The following is a primer for homebuyers unfamiliar with the ins and outs of home inspection. Continue reading

What the B-20 Mortgage Guidelines mean for prospective homeowners

You’d be forgiven for not realizing that November 1 was B-20 Day. Odds are it wasn’t marked on your calendar, and unless you count following banking regulations among your hobbies, it’s a safe bet that the new mortgage guidelines didn’t make much of splash in your day. Regardless, the new regulations affect every Canadian homebuyer, so it’s a good idea to familiarize yourself with what they are and how they relate to you.

The B-20 mortgage guidelines are underwriting regulations from the OSFI concerning federally-regulated lenders. The new guidelines, which were written and released in June, officially went into effect for major banks on November 1. These rules affect everything from proof of income requirements to down payments.

The biggest effect of the B-20 regulations, however, is how they will impact the difficulty of getting a loan for prospective homebuyers. One of the biggest changes concerns tougher qualifying rates for conventional mortgages. Mortgages under five years usually require that a borrower qualify for a higher rate than their actual mortgage in order to prove they can handle the financial responsibility. Under the new guidelines, qualifying rates will be taken from the Bank of Canada’s five-year benchmark rate, making qualifying more difficult and forcing borrowers into longer loans.   Continue reading