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| Renovating your home is within financial reach; increase the value of your home with an updated bathroom or kitchen, new hardwood floors, or energy efficient solutions.
Talk to Steven Porter with Mortgage Architects today to see how you can finance your next renovation project!
Posted by Steven Porter. Steven is a licensed Mortgage Agent with Mortgage Architects and retired, licensed, real estate broker with 30 years experience in residential real estate. Certified Reverse Mortgage Specialist (CRMS); Seniors Real Estate Specialist (SRES) and Accredited Buyer Representative (ABR). Steven can be reached at 1-905-875-2582; steven.porter@mtgarc.ca or online at 1800Mortgages.ca
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Showing posts with label purchase plus improvements. Show all posts
Showing posts with label purchase plus improvements. Show all posts
Wednesday, 23 November 2016
3 Easy ways to finance your home renovation
Monday, 25 July 2016
Renovation spending expected to rise in 2016 as people just can’t afford to move
Housing gridlock — that’s what realtors call it. Affordability issues leave you stuck in your existing home, but looking for a better living space.
About the only move left for Canadians demanding a better home has been to renovate the one they have, which has led to record levels of spending on home improvement. A new survey from Canadian Imperial Bank of Commerce out Wednesday suggests that Canadians are now turning their attention to landscaping — a renovation that doesn’t do much for the appreciation of home values.
The findings from the bank might be another clear sign that Canadians are settling into their current houses because of the state of the market, which is increasingly being choked by a lack of affordability.
“The shift in focus from indoors to outdoors is surprising,” said Barry Gollom, vice-president, mortgages and lending, with CIBC.
Between May 19 and 25, 2016, Angus Reid surveyed 2,129 people online about their renovation plans. The top project was basic maintenance, cited by 54 per cent of respondents, down slightly from 55 per cent in 2015. The big jump was in landscaping, with 42 per cent of respondents planning some type of project, up from 25 per cent a year ago.
Gollom said “landscaping, patio and deck,” is a growing phenomenon and might indicate that people have spent so much money inside their house, that they are now turning their attention to the outside.
Separately, Altus Group has noted that renovation spending in 2014 was $20 billion more than was spent on new homes that year. In 2015, Canadians spent $70.1 billion on renos and Altus forecasts that figure to climb to $71.4 billion this year.
The CIBC survey backs that up, with the average renovation project coming in at $13,017, up from the $12,293 average in 2015, although the bank says only 37 per cent of Canadian homeowners plan to renovate this year versus 40 per cent in 2015.
Bathroom renovations were cited by 33 per cent of respondents, down from 40 per cent in 2015. Only 26 per cent plan to update a kitchen in 2016 versus 31 per cent who said they would in 2015.
“I think the shift has gone from seeing renovation as an investment — the return you see from a bathroom or a kitchen tends to be much higher than on landscaping,” said Gollom. “I think there is focus on quality of life versus the return.”
Interestingly enough, renovation spending is highest in struggling Alberta, with the average homeowner planning a project worth an average $22,951, up from $13,520 a year earlier. In British Columbia the average project is expected to drop to $15,522 from $16,639, while in Ontario panelists said their spending would drop to $13,878 from $15,487 a year earlier.
Benjamin Tal, the deputy chief economist with CIBC, says renovation spending has “mostly stabilized” at this point but at a “very high level” he doesn’t expect to decline very soon.
“At first you had a lot of pent up demand from the recession in 2000 and that was behind much of the activity in the first half of the last decade, but in the second half after 2008-2009 you had the beginning of a new trajectory,’ said Tal, adding that the current renovation market is driven by housing prices. “Basically, people are unable to buy what they want.”
The lack of available product has been cited by real estate boards in both Toronto and Vancouver, which have been the driving forces of the housing boom in Canada. In May, detached home prices rose 36.9 per cent from a year earlier in Metro Vancouver to $1,513,800 and in the Greater Toronto Area detached home prices rose 18.9 per cent during the same period to $986,691.
Brad Henderson, chief executive of Sotheby’s International Realty Canada, said he can’t say exactly how directly this housing gridlock is leading to renovation, but it’s part of what is driving home repairs.
“Whilst people are fascinated by the price of homes, more and more people are not selling because, by the time I sell, pay commissions, pay land transfer tax, and go through the hassle of moving I may not be any better off than I am. So, what I’ll do is renovate and just stay where I am,” he says. “As more and more people choose not to put homes on the market it just encourages upward pressure on prices.”
- Financial Post
Find out how to easily finance your home renovation project here
- Repost by Steven Porter, Mortgage Agent - Mortgage Architects
Steven can be reached through his website at www.1800Mortgages.ca
About the only move left for Canadians demanding a better home has been to renovate the one they have, which has led to record levels of spending on home improvement. A new survey from Canadian Imperial Bank of Commerce out Wednesday suggests that Canadians are now turning their attention to landscaping — a renovation that doesn’t do much for the appreciation of home values.
The findings from the bank might be another clear sign that Canadians are settling into their current houses because of the state of the market, which is increasingly being choked by a lack of affordability.
“The shift in focus from indoors to outdoors is surprising,” said Barry Gollom, vice-president, mortgages and lending, with CIBC.
Between May 19 and 25, 2016, Angus Reid surveyed 2,129 people online about their renovation plans. The top project was basic maintenance, cited by 54 per cent of respondents, down slightly from 55 per cent in 2015. The big jump was in landscaping, with 42 per cent of respondents planning some type of project, up from 25 per cent a year ago.
Gollom said “landscaping, patio and deck,” is a growing phenomenon and might indicate that people have spent so much money inside their house, that they are now turning their attention to the outside.
Separately, Altus Group has noted that renovation spending in 2014 was $20 billion more than was spent on new homes that year. In 2015, Canadians spent $70.1 billion on renos and Altus forecasts that figure to climb to $71.4 billion this year.
The CIBC survey backs that up, with the average renovation project coming in at $13,017, up from the $12,293 average in 2015, although the bank says only 37 per cent of Canadian homeowners plan to renovate this year versus 40 per cent in 2015.
Bathroom renovations were cited by 33 per cent of respondents, down from 40 per cent in 2015. Only 26 per cent plan to update a kitchen in 2016 versus 31 per cent who said they would in 2015.
“I think the shift has gone from seeing renovation as an investment — the return you see from a bathroom or a kitchen tends to be much higher than on landscaping,” said Gollom. “I think there is focus on quality of life versus the return.”
Interestingly enough, renovation spending is highest in struggling Alberta, with the average homeowner planning a project worth an average $22,951, up from $13,520 a year earlier. In British Columbia the average project is expected to drop to $15,522 from $16,639, while in Ontario panelists said their spending would drop to $13,878 from $15,487 a year earlier.
Benjamin Tal, the deputy chief economist with CIBC, says renovation spending has “mostly stabilized” at this point but at a “very high level” he doesn’t expect to decline very soon.
“At first you had a lot of pent up demand from the recession in 2000 and that was behind much of the activity in the first half of the last decade, but in the second half after 2008-2009 you had the beginning of a new trajectory,’ said Tal, adding that the current renovation market is driven by housing prices. “Basically, people are unable to buy what they want.”
The lack of available product has been cited by real estate boards in both Toronto and Vancouver, which have been the driving forces of the housing boom in Canada. In May, detached home prices rose 36.9 per cent from a year earlier in Metro Vancouver to $1,513,800 and in the Greater Toronto Area detached home prices rose 18.9 per cent during the same period to $986,691.
Brad Henderson, chief executive of Sotheby’s International Realty Canada, said he can’t say exactly how directly this housing gridlock is leading to renovation, but it’s part of what is driving home repairs.
“Whilst people are fascinated by the price of homes, more and more people are not selling because, by the time I sell, pay commissions, pay land transfer tax, and go through the hassle of moving I may not be any better off than I am. So, what I’ll do is renovate and just stay where I am,” he says. “As more and more people choose not to put homes on the market it just encourages upward pressure on prices.”
- Financial Post
Find out how to easily finance your home renovation project here
- Repost by Steven Porter, Mortgage Agent - Mortgage Architects
Steven can be reached through his website at www.1800Mortgages.ca
Tuesday, 3 May 2016
A good time for reno loans? Remodeling projects on the rise
Now might be a good time to do those long planned renovations. Remodels and additions are gaining traction in the housing market, according to a new survey from the National Association of Home Builders.
The survey, released Monday by NAHB Remodelers, found that many types of small-scale and whole-house remodels are reaching levels unseen in years.
“While bathroom and kitchen remodels remain the most common renovations, basements, whole house remodels and both large and small scale additions are returning to levels not seen since prior to the downturn,” said 2016 NAHB Remodelers Chair Tim Shigley. “Clients want to add more space, but remodeling a significant portion of the home is no easy feat. That’s why it is important to work with a professional remodeler who has the integrity and expertise to take on these large remodeling jobs.”
Remodelers reported that several projects are more common now than in 2013:
Whole house remodels are up by 10%
Room additions increased by 12%
Finished basements saw an 8% increase
Bathroom additions are up by 7%
Bathrooms remained the most common remodeling projects, according to the NAHB, with 81% of remodelers reporting that bathroom remodels were a frequent job for their company.
- Posted by Steven Porter, Mortgage Agent - Mortgage Architects
Steven can be reached through his website at www.1800Mortgages.ca
The survey, released Monday by NAHB Remodelers, found that many types of small-scale and whole-house remodels are reaching levels unseen in years.
“While bathroom and kitchen remodels remain the most common renovations, basements, whole house remodels and both large and small scale additions are returning to levels not seen since prior to the downturn,” said 2016 NAHB Remodelers Chair Tim Shigley. “Clients want to add more space, but remodeling a significant portion of the home is no easy feat. That’s why it is important to work with a professional remodeler who has the integrity and expertise to take on these large remodeling jobs.”
Remodelers reported that several projects are more common now than in 2013:
Whole house remodels are up by 10%
Room additions increased by 12%
Finished basements saw an 8% increase
Bathroom additions are up by 7%
Bathrooms remained the most common remodeling projects, according to the NAHB, with 81% of remodelers reporting that bathroom remodels were a frequent job for their company.
- Posted by Steven Porter, Mortgage Agent - Mortgage Architects
Steven can be reached through his website at www.1800Mortgages.ca
Thursday, 10 December 2015
3 Easy Ways To Finance Your Home Renovation
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Renovating your home is within financial reach; increase the value of your home with an updated bathroom or kitchen, new hardwood floors, or energy efficient solutions.
Talk to me today to see how you
can finance your next renovation project! |
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Friday, 27 November 2015
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.
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.
- 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) 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.
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
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