Multiple Offers - Questions to consider in a sellers market

When home buyers outnumber sellers, the result can be a multiple offer scenario. If you’re searching for homes in a competitive market environment, you’ll want to take time to understand the dynamics of multiple offers and understand how this might impact your negotiating strategy. Some questions to discuss with your buyer’s representative:

Will I know if I’m in a multiple offer situation?

Not necessarily. Typically it works to a seller’s advantage if buyers are told they are competing with one another. But a seller must disclose the existence of other offers before this can be shared with your buyer’s rep.

How will offers be presented to the seller?

The seller decides how they want this handled, either individually or as a group presentation. Once presented, a seller can elect to accept (or counter) one offer, reject all offers, or reject all offers in conjunction with a request to resubmit a “highest and best” offer.

Will the details of my offer be kept confidential from other buyers?

The only way to preserve confidentiality is to ask the sellers to sign a confidentiality agreement before presenting your offer (which also applies to their agent). However, if the seller decides to have a group presentation of offers, you’ll either have to withdraw your offer or revoke the confidentiality agreement.

If my offer has the highest price, can I be confident that I’ll beat out other buyers?

No. Sellers can accept whichever offer they consider “best” and that may be based on other factors, like the certainty of closing (e.g., the buyer is already approved on their mortgage) or flexibility on closing dates.

What are my options for writing a stronger offer?

In addition to firming up your financing (or paying cash) and offering flexibility on timing, there are a number of other things you can do, including eliminating contingencies, increasing your earnest money deposit or paying closing costs, to name a few. Discuss your options with your buyer’s rep.

If I don’t want to compete with other buyers, can I withdraw my offer?

Yes, as long as you deliver notification to the seller revoking your offer before they’ve accepted it.

Every home buyer benefits from having their interests represented in a real estate transaction, but in a multiple offer scenario, you’ll gain even more if you’re working with your own Buyer’s Representative.

Discuss these and other questions with your buyer’s rep so you can anticipate each step in the negotiation process and improve the likelihood of a successful outcoe

 Steven Porter is a licensed mortgage agent with Mortgage Architects and is formerly a successful real estate broker/Accredit Buyer Representative (ABR) with 30 years past real estate experience. Steven can be reached at 905-875-2582 or EMail: steven.porter@mtgarc.ca

For Millennials, buying a home is a distant dream unless parents help with down payment . . .

 For parents, a reverse mortgage can provide funds            

Young Canadians living in hot housing markets such as Vancouver and Toronto are increasingly looking to their parents for help with down payments when it comes to purchasing their first home.  And, for parents who have seen the value of their homes rise dramatically in the last 10 years, a reverse mortgage is often an attractive way to assist adult children.

That's according to HomEquity Bank experts, who are helping more Canadian seniors set up reverse mortgages so funds may go to adult children needing a down payment on their first home.  

And, financial experts are seeing the same trend of parents helping adult children purchase a first home.

"Ten years ago, this topic rarely came up as most seniors were more concerned with remaining self-sufficient. And, first time homebuyers were purchasing houses on their own. That's changed. Up to 30% of my clients aged 60+ now want to discuss to what degree they can help their adult children financially," explains Rona Birenbaum, financial planner and founder, Caring for Clients.

In fact, it's become such a large part of its service offering that Caring for Clients created a comprehensive, 20-hour assessment program to help clients best determine:

• What is a safe amount to provide to adult children?
• How to be fair and equitable with all children.
• With the amount of money provided, what options are available to adult children? For example, what size mortgage is viable if using funds to purchase a first home?
• How can they protect their money gifted to adult children?

"Most parents want to know that they can protect their money and still lend funds to adult children wanting to purchase a home. By setting up the financial assistance as a zero-interest mortgage, registered on the property, the funds are protected. So, in the event of divorce and the sale of the home, the money goes back to the parents," adds Ms. Birenbaum.

However, if over the long term the marriage does not break down, the parents simply de-register the mortgage and the money is considered a gift, she notes.

"Without help from parents, it's getting to be next to impossible to get into the housing market – especially in Toronto and Vancouver," explains Ms. Birenbaum.

Adds Yvonne Ziomecki, SVP, HomEquity Bank: "The seniors we work with to provide reverse mortgage solutions tell us without financial help, their adult children would be locked out of the housing market.  So, tapping into the equity of their home and providing a down payment becomes an important way to give their children a way to enter the real estate market."

For many first home buyers, condos are a way into the real estate market. The average cost of a condo in Toronto, according to information released in April, 2016 by the Toronto Real Estate Board (TREB) is $393,589. In Vancouver, according to information released in January, 2016 by the Real Estate Board of Greater Vancouver, condos now sell for, on average, $466,600.

HomEquity Bank, the only Canadian bank working exclusively with seniors, provides funds through its CHIP reverse mortgage solution www.chip.ca. Seniors can supplement their income, or tap into the equity of their home, via reverse mortgage monthly or lump sum payments.

About HomEquity Bank

HomEquity Bank is a Schedule 1 Canadian Bank offering the CHIP reverse mortgage solution www.chip.ca.  It was founded 30 years ago as an annuity based solution addressing the financial needs of Canadians who want to access the equity of their top asset – their home. 

Is your car lease keeping you from buying a home?

Getting a mortgage can be difficult. Sometimes, to increase the odds of being approved or to qualify for a larger loan, prospective borrowers will pay down debts or eliminate existing loan obligations. Often, the process for doing so is simple, but there’s one type of financing that could trip up your efforts: a car lease. Here’s a breakdown of why — and what you can do to so avoid any snags.

What’s Your Debt-to-Income Ratio?

When you apply for a mortgage, a broker is going tally up all of the monthly payments you make on existing obligations, including credit cards, student loans, personal loans, car debts and other mortgages. That number gets measured against your income. This debt-to-income ratio helps determine your monthly mortgage payment. (So does your credit score. You can see where yours currently stands by reviewing your credit scores, regularly, on Equifax.ca.) Sounds easy and simple enough, right?

Well, the concept is, but if more than 25% of your income is already going towards debts, you may not be able buy as much home as you think. When you have other existing obligations, your ability to borrow can be reduced tremendously. That $300 per month car lease, for example, can be severely hampering your buying power.
Mortgage Tip: Remember, lenders will use only what you’re obligated to pay on existing loans in calculating your debt-to-income ratio. Choosing to pay more on your debts can be a good financial move, but mortgage lenders generally don’t give you any benefit for choosing to do so.

Why a Car Lease Can Trip You Up

Unlike an auto loan, a car lease can be trickier to workaround if you’re trying to pay off debt to qualify for a mortgage. Let’s say your credit report shows a car lease payment at $300 per month. There is a balance on the credit report of $6,000 due, which is the remainder of the lease. If you had a car loan with these exact terms, you could write a cheque to pay off the $6,000 obligation. Case closed.

Unfortunately, that option doesn’t apply to a car lease. You can give the car back and pay the $6,000 balance that is due. However, to qualify for a bigger mortgage, the lender will need to verify there is no obligation due for car. If you give the car back, the mortgage lender may ask what you’re going to drive instead — especially if there is a commute time from where you work to where you plan on residing.

Should you find yourself in this predicament, here are some options to consider.

• Call your car dealer. You can ask if they have any specific options for getting out of the lease. You’ll need to make it crystal clear that you must be out of the lease obligation completely.
• Transfer the lease to someone else. Your mortgage lender should be OK with this option as long as you can show and verify the obligation is completely out of your name and that there is no obligation associated with it. You can search online for options if your car dealer doesn’t have any transfer suggestions.
• Pay out. Give the car back, pay the balance due and either buy a new vehicle in cash, removing any debt-to-income ratio predicament or finance a car that has a lower monthly payment. The key here is that the payments need to be reduced or totally removed if you want to maximize your buying power.
• Consider your priorities. A great deal on your car lease may not matter if you are serious about buying a home, plain and simple. Ask yourself: Is the car more important than the house?

Paying Off Debt for a Mortgage

Paying off debt to qualify for a mortgage usually needs to be documented in the following ways.

• Money used to pay off the obligation cannot come from the reserve requirement your lender almost certainly has. Lenders usually want you to have at least three to four mortgage payments in the bank, called reserves, as a cushion when granting your loan request.
• You’ll need to produce a paper trail showing money leaving your bank account and going to the creditor to pay off debt or a provide copy of the canceled cheque to show you no longer owe the obligation.

All of these steps may seem unnecessary and overly repetitive, but they are a by-product of the current mortgage lending world. Remember, stringent underwriting requirements help to ensure lenders are making good loans and, more importantly, that you can actually afford the house you are looking to buy.

Are you serious about buying a home? Call or email me to review your options. Home ownership may be closer than you think.
Steven Porter is a licensed Mortgage Agent with Mortgage Architects, and Accredited Buyer Representative (ABR) and Seniors Real Estate Specialist. Steven can be reached at 1-905-875-2582, Email steven.porter@mtgarc.ca or apply online at www.1800Mortgages.ca

Purchase Plus Improvements Home Purchase Program

Ever watched HGTV's "Income Property", "Property Brothers" or "Love It or List It"? Wonder how these folks can afford to tackle some of these projects? Well I'm about to tell you the secret . . . the "Purchase Plus Improvements" or "Re-Finance Plus Improvements" mortgage financing solution.  


 The "Purchase Plus Improvements Program" can help qualified home buyers make their home just right for them, with tailored improvements, immediately after taking possession of their purchased property. All this can be done with one manageable mortgage and with only 5% down-payment. 

 

Here's how the "Purchase Plus Improvements" program works. First, the program is available for property purchases containing up to two dwelling units with only a minimum 5% down-payment and  up to four dwelling units, i.e. triplexes and fourplexes with a minimum 10% down-payment of the combined purchase price and improvement amount.

This program may be used for fixer-uppers requiring major repairs such as a new roof, driveway, septic or well. Or for improvements such as a new kitchen, bathrooms or basement apartment. The key is the improvement must add value to the property. An important point to also note is improvements exceeding either 20% of the homes purchase price or $40,000. require a full appraisal of the home.

Down-payments may come from personal savings, RRSP withdrawal, non-repayable gift, sweat-equity, existing home equity, proceeds from the sale of a property, Government Grants or a combination.

This program is "mortgage insured" and is offer by the three major mortgage insurers, CMHC, Genworth and Canada Guaranty. Therefore, like any home purchase with less than 20% down-payment, mortgage insurance premiums will apply and home buyers will need to meet the financing guidelines of these insurers as well as the lender.

With the "Purchase Plus Improvements" program, the mortgage loan is calculated on the property's "As Improved Value". Therefore, keep in mind the minimum down-payment required will be a percentage of the "As Improved Value" not the purchase price.

Planning and preparation are always important as improvement funds are NOT typically advanced until after the improvement is complete and inspected. Therefore the home buyer will need to arrange trade credit and/or have access to funds for deposits, draws, etc. Also, improvements usually require completion within 90 days of closing. So make sure you take this into consideration when booking a contractor and scheduling delivery of materials.

It's always prudent to obtain written estimates of the improvements and verify that they are eligible under the program prior to finalizing (removing the condition of financing approval) the purchase. Let your Realtor know you plan to use the
"Purchase Plus Improvements" program fro your purchae. They can help you and the Mortgage Agent with the arrangements.
The following is a simplified example of how the "Purchase Plus Improvements" program may work for an improvement of less than 10% of the purchase price of a home and a maximum of $40,000.

• An accepted Agreement of Purchase and Sale on a home for $400,000. The home buyer is providing a 5% down-payment.
• The improvement is a new kitchen. A written quote for $30,000. and specs is obtained between acceptance date of the offer and the deadline for the "Condition of Financing" Approval.
• The Appraiser is contacted by the Mortgage Agent prior to the financing condition's deadline. The home is appraised “As Is” for $405,000 ($5,000 more than the purchase price) and estimates the “as-improved” value, as per the quote for $440,000. The mortgage loan amount is always the lesser of appraised or the purchase price, so therefore maximum loan amount is $430,000. ($400,000. purchase price plus $30,000. for the improvement value)
• Considering a 5% down-payment (95% loan-to-value), the maximum mortgage loan will be $408,500. and the required down payment $21,500.
• At closing, the home buyer's lawyer pays the Seller the $400,000. original purchase price as follows: 95% of $400,000 ($380,000) authorized by the Lender plus $20,000 (5% of $400,000.) of the home buyers' down-payment. The home buyers' Lawyer retains, in trust $30,000., the balance of mortgage loan and down-payment funds.
• Once the home buyer takes possession of the property, work on the kitchen can commence. Once completed, regardless of whether the kitchen comes in over or under budget or even a if different contractor is used, as long as the work is completed to the original specifications as confirmed by the Appraiser, $30,000. is available for release by the lawyer. It is important to note that if the project comes in over budget, the home buyer will be responsible for the difference.

When saving and budgeting for a down-payment for a home purchase, keep in mind you'll need to budget an additional 1.5% to 2% of the purchase price for closing costs. i.e.: legal fees, adjustments, land transfer tax, property tax holdbacks, etc. Read my post:  "What you can expect for closing costs" for more information on this subject. 

Already own a home you need to fix up to keep or resell and don't have the cash or the equity in your home? The "ReFinance Plus Improvements" program may be your answer.

You don't have to settle. Own your "Dream Home" with the "Purchase Plus Improvements" or the "Refinance Plus Improvements" programs. Contact me before you start looking at homes or refinance.

Author, Steven Porter, Mortgage Agent - Mortgage Architects. www.StevenPorter.ca; steven.porter@mtgarc.ca; 1-905-875-2582

First-Time Home Buyer? You Need to Understand These Lending Definitions

Purchasing a home is a life-changing investment. A big decision like buying a first home, combined with confusion about the process, can lead to a detrimental financial mistake. Take the time to understand some of the key lending industry jargon.

Mortgage Loan Underwriting: The underwriting process is used by lenders to determine the amount of risk a mortgage would be. Before approving a loan, an underwriter will evaluate your credit score and history, credit score of a spouse or partner in the purchase, bank accounts, employment history, current income, and current and projected debts and assets.

Loan Points: A point is equal to one percent of the amount borrowed, or principal, of your mortgage. Lenders charge points in both fixed-rate and variable-rate mortgages in order to increase the returns to the lender on the mortgage and to cover loan closing costs. Points are usually collected at closing and may be paid by the borrower, lender or or may be split between them. There are two types:

• Discount Points are paid to reduce the interest rate on a loan and are normally paid at closing.
• Origination Points are paid at closing. On a conventional loan, a loan that is not insured against mortgage default, the loan origination fee is the number of points a borrower pays to typically to a mortgage broker for arranging a mortgage.

Assumable mortgage: A home mortgage that allows the buyer to take over the seller’s mortgage. The buyer makes mortgage payments and complies with other terms of the original seller’s existing loan.

Balloon mortgage:A mortgage that is not fully paid off over the term of the loan, leaving a balance at the end. The borrower must either pay off the remaining mortgage or refinance the loan.

PITI: Abbreviation for the major expenses that make up a mortgage payment: principal, interest, property taxes and homeowners’ insurance.

Prepayment penalty: A charge imposed on a borrower who pays off a mortgage loan before its due date. Lenders impose prepayment penalties to encourage borrowers to hold a debt, and keep paying interest on it for the whole term of the mortgage.

Title report: The written examination of a real estate title search, including a property description, names of titleholders and how the title is held (joint tenancy, for example), mortgages and other charges, and liens. A title report is needed before a lender will agree to finance the purchase of the property. The report is typically prepared by a Lawyer.

Contingency: A provision in a contract stating which terms of the contract will be altered or voided if a specific event occurs before the closing of the property. For example, a contingency in your home purchase contract might state that, if the buyer does not approve the inspection report of the physical condition of the property, the buyer does not have to complete the purchase, or an included contingency that the buyer be allowed a certain number of days to obtain his financing or to sell his house.

Mortgage Default insurance: Insurance that reimburses a mortgage lender if the buyer (borrower) defaults on the loan and the foreclosure sale price is less than the amount owed to the lender (the mortgage plus the costs of the sale). A home buyer who makes less than a 20 percent down payment will most likely have to purchase mortgage default insurance if dealing with a bank or first tier lender.

Closing costs: Closing costs are fees, charged by your lawyer, lenders, government and third parties, related to the purchase of the home. An estimated one and a half to five percent of the purchase price of the home. You will usually pay closing costs at the time you close on a mortgage. The cost can include a loan origination fee, processing fees, discount points, appraisal fee, title insurance and legal fees, Land Transfer Tax, and HST/GST

Deposit (Earnest) money: This is in the form of a deposit and tells the seller that you’re committed to your offer. Once the seller accepts your offer, the deposit money will go towards your down payment and closing costs.

Take this glossary with you to your lender meeting and you will feel much more comfortable throughout the home buying process.

 How to Secure the Best Financing Rates and Terms When Buying a Home. Best Financing, A Three-Point Plan

Should you rely on a broker for a great mortgage?

If you visit different mortgage broker websites, you’re bound to come across wording like this: “We work with over 50 lenders to serve you better.”

The idea is that having more lenders to choose from when shopping for a mortgage improves your odds of getting the best deal. But is more really better and is it enough to rely on a broker to contact lenders on your behalf – or should you call around yourself?

Access to multiple lenders is a key benefit that brokers like to promote. However, the pool of banks that brokers have access to has shrunk since 2007, when Bank of Montreal, Canadian Imperial Bank of Commerce, ING and others began exiting the independent broker market. Those banks feel they can profit more by selling mortgages directly to customers.

Furthermore, most brokers don’t compare every available lender. Maritz Research found that 90 per cent of the typical broker’s volume goes to just three lenders. That’s partly because some brokers feel more comfortable in knowing a few lenders well, versus many lenders superficially. It’s also because brokers often get preferential rates and service – like better turnaround time – from their primary lenders.

Yet another reason, in certain cases, is self-interest. Lenders pay financial incentives to brokers who send them a certain amount of volume. Such incentives can be a conflict of interest if they lead a broker into recommending a less competitive mortgage.

When a broker deals with just three lenders, he or she might as well be a sales rep for those companies. There’s nothing necessarily wrong with that – if the lender has the best mortgage for the customer, but that’s not always the case.

One way to avoid brokers who don’t shop around sufficiently is to deal with an established and experienced high-volume broker, someone who isn`t as pressured to send a set amount of volume to a particular lender. These brokers are typically found high up in Google’s local search results, due to their longevity, referrals and professionally-run businesses.

In a perfect world, it would be easy to find a broker who shops all lenders objectively, even lenders that don’t pay brokers. Unfortunately, most brokers don’t have the time or technology to closely track the rates, terms and guidelines of 50-plus lenders. And brokers, like bankers, like to get paid and seldom recommend outside lenders.

So if you truly want to shop all major lenders, you’ll need to do your own legwork. If you’re getting a new mortgage, you must:

Contact these non-broker lenders yourself: RBC, BMO, CIBC, HSBC, ING, Manulife Bank, PC Financial

Go direct or use a broker to get quotes from these lenders: Scotiabank, TD Canada Trust, National Bank, Industrial Alliance, Desjardins and the major credit unions

Use a broker to get quotes from wholesale lenders like First National, MCAP, Street Capital, Home Trust, Merix Financial, ICICI Bank, CMLS, MonCana Bank, Radius Financial, RMG Mortgages, AGF Trust, B2B Bank, Xceed and others.

In short, you’ll never truly know all the deals out there unless you take matters in your own hands and contact dozens of lenders. However, you need to be sure it’s worth your time. You might save another 0.05 or 0.10 percentage points off a great bank or broker rate by shopping yourself (that’s about $49 savings per $100,000 of mortgage per year).

But the legwork could literally take hours of asking the right questions and negotiating with all the key lenders. And if you inadvertently pick a lender with onerous fine print, the cost of that lender’s restrictions could easily outweigh any upfront rate savings.

Using rate comparison sites for leverage is another strategy. The problem there is that rate sites typically don’t reveal all the limitations of a mortgage (e.g., penalty calculations, porting rules and mortgage increase policies, to name a few). So you still need advice or lender feedback to find the ideal mortgage at the absolute lowest possible rate.

Even if you plan to get your mortgage directly through a bank – like 57 per cent of Canadians do – contacting a broker might work in your favour. At worst, you’ll get market and rate intelligence that you can use to your advantage at the bank. At best, the broker may find you a flexible product that costs less, and/or suggest a strategy that saves you interest.

And, brokers have dozens more options than any single lender, which gives them access to cut-rate pricing, easier approvals for people with special situations (eg. self-employed or with bad credit history), lower penalties for breaking a mortgage early, and more choice of features, like pre-payment privileges, linked credit lines and the ability to extend your term before the mortgage comes due, penalty-free. (Banks too have unique features not available through brokers. Examples: BMO’s Cash Account, TD’s HELOC and Manulife’s One account.)

Comparing dozens of lenders on your own can be educational, but it takes considerable effort and some know-how. If you know what questions to ask, that extra effort can lead to a slightly lower upfront rate. I’ll list the essential questions in a future column.

Just remember this. The cheapest rate doesn’t necessarily equal the least money out of pocket. Things like costly payout restrictions, lender refinance policies and accelerated payoff privileges can add or subtract thousands from your total borrowing costs.

In practice, most Canadians lead busy lives and are content to let a banker or broker find them a mortgage that’s “good enough.”

But if you have the spare time and truly want the best deal, you can engage a broker to shop for you, and call the non-broker lenders yourself and cross reference your quotes with a rate comparison site. And while you’re at it, don’t be afraid to get a second broker opinion.

by: Robert McLister editor of CanadianMortgageTrends.com

The Myth of the Property Ladder (A Warning to Young Canadians)

Parents are great, they spend thousands of dollars and countless hours on their children and get almost nothing in return. Joking aside, my point is that parents usually mean well. There is one area however where I believe Canadian parents are leading their precious children astray, real estate.

The property ladder refers to when buyers attempt to get their first house, where they can than save up and subsequently trade up to a better house. The whole idea, is just to get on the first rung and according to baby boomers you'll be on your way. But just as getting good grades and a good University degree was once a sure fire way to success in the past, what worked for one generation might not work for the next.

Real Estate for most young Canadians is a leveraged investment. Well not just leveraged, but very leveraged. My generation is quick to scoff at the executives from the financial crisis who ran investment banks at sky high debt to equity ratio's of 20:1+. Yet, they think nothing of putting 5% down on a house (which of course is the exact same amount of leverage). A measly 5% drop in house prices and you are wiped out. That's if you can even put 5% down in the first place. Many can't. This is where the parents step in. 

Beyond the emotional push to buy a first house with the common (yet ridiculous argument) of "why pay somebody else's rent?"  I have seen many of my friends' parents routinely gift the 5-20% of the down payment of their first house. No, they are not just giving them free money but rather giving them the money on the condition of a house purchase (and saddling them with massive mortgage debt). It's kind of a like a drug dealer offering free cocaine but only once you get addicted. It's a terrible system so why do parents do it?

The biggest reason is because it worked very well for them.  There is a very stark difference however that will dramatically effect these housing returns going forward: interest rates.   Baby boomers have ridden a three decade wave of falling interest rates. This low cost of financing has lead to the record high price to income ratio. With the end of quantitative easing in the US these low rates are very possibly coming to an end. (Remember Canadians' don't have 30 year fixed mortgages, they reset after 5 years for most people.)

This house price to income ratio chart on the right is from a September 2014 Bank of Canada presentation. Note that although it once cost just a little over 2x your annual income to buy a house, now it is 5x. 

What is actually most disturbing about this chart  though is not the record high number but the linear trend line that CMHC was so kind to add. The price to income ratio over time will revert to its mean. If it didn't, you would have house prices continue to outpace incomes and consume well over take home pay. That's what makes this dotted black line so deceptive. To the casual observer (say the CMHC board which has a deep conflict of interest with its ties to the construction and finance industry) it makes it seem like 'everything is on track' when in reality the dotted line should stay relatively flat over time. Charlie Munger would probably call it 'bullshit graphing' or something along those lines. Anyways, if this graph were to revert to any where near its historical level there would be big problems for Canada and its record high debt binge.

Moral of the story to Canadian millennials: Don't let ma and pa get you unknowingly hooked on the debt cycle, a mortgage will ultimately be your debt, not theirs. Borrow accordingly or better yet, rent until prices make sense. - by hardcore value

Different Mortgage Options - What to Choose?

 

What is an open mortgage?

An open mortgage can be prepaid, in part or in full, during the term of the mortgage without paying a prepayment charge. The interest rate on an open mortgage is often higher than the interest rate on a closed mortgage. An open mortgage can provide flexibility until you are ready to lock into a closed term.

What is a closed mortgage?

A closed mortgage is one that cannot be prepaid, renegotiated or refinanced before the end of the term without paying a prepayment charge. However, most closed mortgages contain certain prepayment privileges, such as the right to make a prepayment of 10-20% of the original principal amount each year, without paying a prepayment charge.
A closed mortgage often has a lower interest rate than an open mortgage.

What is a fixed interest rate mortgage?

• With a fixed interest rate mortgage, in most cases your interest rate does not fluctuate during the mortgage term. Your regular mortgage payment amount does not change.
• You know exactly what your regular payments will be and how much of the principal balance will be paid off during the term.

What is a variable interest rate mortgage?

• With a variable rate mortgage, the interest rate changes with changes to the CIBC Prime Rate. In addition, your regular mortgage payment amount is fixed and does not change.
• When the CIBC Prime Rate decreases, the amount of interest you pay will also decrease. A smaller portion of your regular mortgage payment will be applied to pay interest, and a larger portion will be applied to pay down the principal amount of your mortgage.
• When the CIBC Prime Rate increases, the amount of interest you pay will also rise. A larger portion of your regular mortgage payment will be applied to pay interest, and a smaller portion will be applied to pay down the principal amount of your mortgage.

Why choose a short term mortgage?

A short term mortgage generally offers a lower interest rate than a longer term mortgage. When current rates are high and you think rates may drop, choosing a short term mortgage allows you to lock in for a shorter period. A short term mortgage may also be a good option if you plan to sell your home or pay off the mortgage early.

Why choose a long term mortgage?

A long term mortgage generally offers a higher interest rate than that of a shorter term mortgage. When current rates are reasonably low, choosing a longer term mortgage secures the interest rate for a longer period of time and makes budgeting easier.

Free On-Line Mortgage Pre-Approval

Steven Porter - Mortgage Advisor, CIBC - 1-888-885-8962, steven@stevenporter.ca
www.FreeMortgageInfo.ca

Today's Most Desirable Home Features

Housing trends and styles are changing constantly. Today, more than ever, buyers have a strong sense of what they want in a home. 

Today’s desirable home features depend greatly on the type of buyer.  Buyers can be divided into two main groups. The first group are first-time buyers which is pretty self-explanatory. The second group are the move up buyers, which are looking to move into a home that addresses the shortcomings of their existing home. They aren't necessarily second-time buyers but they are often people that have out grown their current home. Buyer age is also a main factor in deciding the desired home features.

This article focuses on what is hot in the housing market today. Whether you are planning on renovating, selling, or you are looking for a new home, this information will help you make choices that will contribute to both your real estate enjoyment and investment.

Home Exterior

Today, stone and stucco are very popular choices. Brick is the standard material used with mass builders, but the more customized and trendy homebuilders are using stone and stucco on a more frequent basis.

Floor Layout   

Bungalows are hot nowadays. Excessive floor level changes are no longer popular as people desire to live on one or two levels.

Room Sizes

Room sizes have been gradually increasing for a number of years. Buyers tend to place the most importance on three key rooms: the kitchen, family room and master bedroom. You can expect to see these three rooms continue to increase in size over the next 10 years while rooms such as the living and dining room are likely to get smaller or disappear altogether. Many new homes scrap the living room and instead incorporate that space into the family room or the 'Great' room.

Buyers still, ideally, desire four bedrooms in their home and would like, if possible, two living areas. One of the living areas can be the recreation room in the lower level (basement).
A master bedroom on the main floor is ranked very important for buyers 65 and older. A two-car garage with ample storage area and a main floor laundry area is desirable for move-up buyers.

Kitchen and Bathrooms 

The kitchen is becoming the hub of the house. The most desired features for the kitchen include: an abundance of counter space, a butler’s pantry, deep drawers and two sinks. Stainless steel appliances are also very popular today, and in the upper end market, appliances concealed as cabinetry are very chic.

Large kitchens with an island and counter tops made of granite or marble are very desirable for move up buyers. However, this must be matched with stylish kitchen cabinets.

Luxurious bathrooms with a separate tub and multiple shower heads; pedestal sinks and large mirrors; an overall spa like feeling; attached dressing rooms and a place to sit are all desirable features. Master suite soaker tubs and whirlpools are still desirable for many home buyers, but not as important as other features.

Energy Efficiency 

With the green movement becoming more popular, energy efficient appliances, high-efficiency insulation, eco-friendly treatments, and environmentally smart building plans are among the "green" features touted in homes.

Tech-readiness 

Satellite and internet wired along with multiple phone jacks are what people want in today’s technology world. With today’s busy lifestyles relaying heavily on technology, even a day or two without high speed internet could be a major inconvenience.

Home Office 

Today, many people would much rather have home office space than a formal dining room. Many employers are seeing the business advantages of allowing employees to work from home. As well, many people are using work from home opportunities to help supplement income because of work shortage or as an opportunity to make money online.

Outdoor Living Space 

The popularity of outdoor spaces continues to grow. Patios, deck, exterior lights, fenced yard and fire pit extend the outdoor living space at home and make a great extra feature.

Other Notables

Some other notable features that home buyers consider very important when buying a home include central air conditioning, recessed lighting, hardwood flooring, energy efficiency and the potential to turn a profit should they decide to sell their home in the near future.

Today’s buyers are looking for a little luxury and features and treatments that are the highest quality their price range will permit.

Copyright 2014 Canada Realty News
Posted by, Steven Porter, Mortgage Advisor - steven@stevenporter.ca

Home inspection . . . A team approach

It may be difficult for a home inspector to detect issues behind any walls or under floors and only certain specialists may be qualified detect certain flaws in furnaces and fireplaces. In rural properties, it is common to have separate inspections for a home, well and septic systems, as these elements require certain expertise to properly inspect and advise potential buyers.

Expertise in these areas include a fireplace inspection by a qualified wood energy technology transfer (WETT) professional once a year. This is a real safety issue as an improperly working fireplace can cause a fire in your home. Furnaces and HVAC systems should be checked once each year for similar reasons. This not only ensures that your equipment is operating safely, but informs you so you may be able to make changes to your equipment that will make your system operate more efficiently, saving you money in the long term.

Sellers should consider such a pre-inspection prior to putting their home up for sale, to demonstrate to potential buyers that the systems are operating safely.

Mold is becoming an even larger issue especially after flooding and sewage backups. The good news is that there are now companies that can inspect for moisture within wall cavities, with sophisticated infra-red equipment.

When you are about to make one of the largest purchase decisions of your life, it is important to have as much information that you need in advance. A home inspection team may supply the answer.