Archive for the ‘Buying a Home’ Category

Tips for Home Buyers, Home Maintenance and Renovations

Sunday, September 8th, 2013

I just spent an hour browsing through the CMHC (Canada Mortgage and Housing Corporation) website and was amazed by the wealth of information they have for home buyers and home owners.

Canada Mortgage and Housing Corporation

 

For those of you new to home ownership and mortgages,  CMHC provides mortgage loan insurance that enables you to buy a home sooner with a minimum down payment of 5%.

The  CMHC  site has dozens of informative articles and videos aimed at helping you buy, maintain and renovate your home.

Here’s a synopsis of the information and where to find it:

Buying a Home

The information in this section includes a Five Step Home buying Primer as well as information on; Buying Your First Home, Choosing a Neighborhood, Buying Condos and information on Government of Canada Home Ownership Incentives.

CLICK HERE for information on buying a home.

Maintaining a Home

For most Canadians, their home is their most important investment. It’s where your family spends a lot of time, so keeping it healthy, well tended and safe is important. A regular schedule of seasonal maintenance and repairs can help you protect your investment by putting a stop to the most common and costly problems before they occur..

CLICK HERE for information on maintaining your home.

Renovating Your Home

Planning is the key to a successful renovation. To help you plan your renovation project, CMHC has information and easy-to-understand tips that can help you assess your requirements and learn the key questions before you get started.

CLICK HERE for information on how to successfully renovate your home.

Are you buying a home for the first time?  Do you need CMHC backing?  Let us guide you through the whole process … it’s easier when you know how!    Call me now (Justin Blacklock)  and we can get started right away!  604-736-1855

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Should I Have a Home Inspection

Sunday, August 25th, 2013

A home buyer should always have a home inspection when purchasing a home. A home inspection is an examination of a property to evaluate the overall condition of a home as well as the major systems and components. In other words, every inch of the home—inside, outside, under and over—from the crawl space to the chimney and roof.

What is Inspected

A typical home inspection includes a walk around the exterior of the home to see if there are any glaring problems, such as loose siding, dry-rotted window frames and cracks in the foundation. The inspector will also verify the roof is in good condition.

he home inspection will also include a check of all appliances to be sure they are working properly. Dishwashers, toilets, sink faucets, tubs and showers will be checked for water pressure, leaks, evidence of past water damage.  The furnace and hot water heater will be checked to ensure they are working properly and the inspector will probably ask the age of all appliances and systems.

Other interior systems the home inspector will check include electrical, HVAC, plumbing, insulation, floors, ceilings and walls, windows and doors. If the home has a fireplace, the inspector will verify it is clean, look for cracks or loose bricks in the chimney, ensure flashing is securely attached around the chimney and that a chimney guard is attached to prevent birds and small animals from getting inside. (Only Wood Energy Technology Training certified inspectors are qualified to inspect wood-burning appliances).

The home inspector will provide you with a detailed inspection report, including recommendations for repairs or improvements. When you receive the report (usually within 2-3 days) you can decide if you will ask the home seller to pay for any work you want done as part of your offer to purchase.

If you have any questions about buying a home talk to us, and we’ll walk you through the decision making process.   Call Justin at  604-736-1855.

 

Additional Expenses Home Buyers Should Budget For

Thursday, August 8th, 2013

Goods and Services Tax (GST)

If you buy a brand new home (new construction) it is usually subject to Federal Goods and Services Tax (GST). The current tax rate is 5% but a partial rebate may be available under certain circumstances. Our job as your mortgage broker is to help you figure out what programs you are eligible for.

Appraisal Fee

A professional appraisal will do a physical inspection of the property, carefully noting information about the number of rooms and the general condition and appearance of the home. Then the home will be compared to comparable properties and a value will be assigned. The cost for an appraisal is generally around $200.

Home Inspection

You should always have the property undergo a full inspection. The inspector knows what problems to look for and will issue a full inspection report. This will give you the option of declining to purchase, asking for repairs,  re-negotiating the price, or carrying through with your original offer to purchase.

Moving and Redecorating Expenses

An expense that isn’t often considered a “closing cost” is that of paying for a mover to transport your furniture and household items to your new residence. Also keep in mind you’ll want/need to buy home décor items and possibly furniture, fencing, and other items for your new home.

Electricity and Telephone Transfers

Home buyers should expect to pay about $75 each to have power and telephone services transferred from a former to a new residence.

ACERAGES, RECREATION AND INVESTMENT PROPERTIES

If you are purchasing outside the city, on an acreage or private development you may also have to consider:

Tests for Water Quality

A water quality test will be required if you are purchasing a property that uses well water. The cost for this type of test ranges from about $100 for a “do-it-yourself” test to several hundred to pay a professional to conduct this test as well as a test to determine the flow rate of the well.

Septic Field Test

If the property you plan to buy has a septic field, it’s a good idea to have it tested for leaks or other problems. The cost for this test is about $300. If a septic warranty is included in your purchase agreement, you can avoid paying this fee.

Fuel Adjustment Expense

If the home you plan to purchase uses heating oil or has a propane burning fireplace, you will be required to pay the owner for a full tank of fuel at closing.

Our job is to get you the best available mortgage and to advise you on many of the cost saving programs you may be eligible for.

 

If you have any questions about buying a home talk to us, and we’ll walk you through the decision making process.   Call Justin at  604-736-1855.

Qualifying For a Mortgage – How Much Can I Afford?

Saturday, June 22nd, 2013

 

 

 

 

 

 

 

 

Key Components

Components of a mortgage payment include the principal (dollar amount of loan) and the interest cost, taxes and heat. These figures combined equal your mortgage payment.

Insurance

Sometimes other costs, such as insurance payments and Homeowner’s Association (HOA) fees can be included as part of the mortgage payment. Borrowers must obtain fire insurance prior to closing on a home, but the payments may be made in a lump sum or can be paid for separately. If you borrow more than 80% of the home value, you will also be required to pay for Private Mortgage Insurance.

Taxes

In many cases, mortgage companies escrow monies to use for paying property taxes and homeowner’s insurance. These payments are often included as part of the mortgage loan payment, but sometimes a borrower can opt out and pay the fees to the parties directly.  Whether you pay them as a part of your mortgage payment or pay them independently, be sure to include the expenses when determining your total monthly expenses.

Mortgage Calculators

To determine the maximum amount a borrower is eligible for, a mortgage broker will use one of several calculators or formulas to help you decide the mortgage payment you are comfortable paying and if your income is sufficient to satisfy a lender. To see the Averbach Mortgages calculators, click here.

Other Debt and Expenses

Other costs that should be considered to determine how much you can afford to borrow include property taxes and payments for other debts such as credit cards. When determining your total monthly payment, you would be wise to include your monthly expenses for telephone, electricity, water and cable as well as any other regular payments you make.

The more accurate and complete information you provide your mortgage broker, the better he or she will be able to match you with the lender that will best be able to meet your needs.

 

If you have any questions about the steps necessary to pre-qualify for a mortgage please give Justin (604-736-1855 ) a call or fill out the form on our Contact Us page.

What is YOUR Renewal Risk

Tuesday, May 14th, 2013

Came across an interesting article in the Globe and Mail.  Bruce Joseph, a mortgage broker in Ontario is advising his clients to take out 10 year mortgages to reduce their “renewal risk.”

Averbach's Onlne Calgulator

Joseph’s  spin on it is that he is not really worried too much about bank rates increasing dramatically.  Rather he asks, what if you are on “the edge”  with a minimum down payment and a high mortgage. What would happen if your financial circumstances were to change … what would happen IF your mortgage holder were to “refuse” to automatically renew your mortgage?

Mr. Joseph’s concern isn’t that people will have to renew mortgages on homes that have fallen in value. Rather, it’s that someone will have to requalify after having been hit with a drop in household income or a job loss.

According to the Globe and Mail …

. . .  draft regulations issued last year by the regulators at the federal Office of the Superintendent of Financial Institutions did raise the idea of lenders requalifying borrowers at renewal. The measure was left out of the final rules, but lenders can use it if they want.

What do WE think?  The risk of not having your mortgage renewed is exceedingly small unless you have NOT been paying your mortgage payments regularly.   IF you are in an extremely volatile job market, or are unsure of a steady income you MIGHT consider a 10-year mortgage.

We think a better choice is getting a one to three year fixed mortgage  with rates currently ranging from 2.49 to 2.75%.  In comparison a 10-year fixed mortgage is at about 3.69%.  (NOTE: rates are constantly changing and are very volatile, so be sure to check with us before making your plans.)

Talk to us, and we’ll walk you through the decision making process.


Call Justin at  604-736-1855.

You can read the Globe and Mail article HERE.

 

When Rates Are No Longer The Major Deciding Factor

Thursday, April 18th, 2013

Mortgage rates are normally based on the Bank of Canada rate which is presently 1%. The rates vary slightly between financial institutions, and are presently ranging from 2.74 to 4% depending on the length of the term and whether you choose a fixed or variable rate.

Check out our current rates here.

 

The rates that YOU will be offered are based on the amount of your down payment and your credit rating.

In this market place we look for the BEST combination of rates and features. Depending on your needs and circumstances we look for a package that has great flexibility and good terms.

 

rates plus benefits

 

Here are some of the features that are available:

Prepayment – With a pre-payment privilege, you can make payments toward the principal portion of your mortgage over and above your monthly payments.

Closed mortgages have different types of pre-payment options. The amount you can pre-pay becomes important if you get bonus payments, a windfall or an inheritance.

An open mortgage means you can pay the entire principal sum without notice. This is a good option if you are self-employed or if you get regular bonus payments.

 

Portability -  This option allows you to transfer the balance of your current mortgage at the existing rates and with the existing terms and conditions, to your new home.

 

Expandability – If you need additional funds down the road, will your mortgage terms allow you to increase the principal amount? Normally the new rate will be a blended amount of the initial mortgage rate and the current rates. If you know you have a large renovation project planned, or if the kids are off to university this is a good option.

Do  YOU Prefer Security or Flexibility?

Mortgages are available with closed, open and convertible options, with fixed or variable rates. The options you choose should be based on the market (going up or down), on your financial goals and on your risk tolerance (desire for long-term security).

 

There are Two Rate Structures to Choose From:

A fixed-rate mortgage will remain the same for the length of the negotiated term. Your payment schedule is established in advance. You can choose either an open or closed mortgage, depending on the term.

A variable-rate mortgage fluctuates with the current market rates. Your monthly payment will remain constant (usually for a year or two), but the amount allocated to your principal will vary. If rates are going down, this may be a good option. If rates are start rising, you may want to convert to a fixed-rate mortgage.
If you are on a tight budget, you may be willing to pay more for peace of mind.

 

There are Three Payment Types to Choose From:

Open Mortgage
– This type of mortgage offers a great deal of flexibility, as it can be repaid in part or full at any time without penalty. This is a great mortgage if you believe interest rates are moving down or if you plan to move in the near future.

Closed Mortgage – Interest rates are fixed for the full term of the mortgage, and you will have to pay a penalty to change the agreement conditions. This type of mortgage is ideal for buyers who think that interest rates will rise and who are not planning to make any moves over the term of the mortgage.

Convertible Mortgage – With this mortgage you have the flexibility to convert to a longer closed mortgage at any time without penalty. If  rates rise, you can lock in.

 

Need a Mortgage?

If you are planning on buying for the first time, moving to a new home or renewing your mortgage, you should know where you stand. Please give us a call at 604-736-1855