Home Ownership

Sifting through home listings online can often be very different than than the experience you have in person. That’s why open houses are extremely beneficial to those interested in purchasing a new home. It allows you to get a real feel of the home and whether or not it’s the right fit for you and your family. That being said, an open house needs to be taken seriously, as a perfectly staged home often can hide flaws or areas that may need improvement. To make sure you’re getting the most out of your search, follow these quick tips to know what to look for during an open house viewing.

Layout

Pay close attention to the layout of the home. The layout should provide flow from one room to the next, with rooms that offer adequate space for your family needs. If you have small children, you’ll want the bedrooms to be on the same floor as the master bedroom. If you have older children, you may want them to have their own bathroom. If you have teenagers, you’ll most likely want their room to be farther away from yours or to at least have enough space to give them some designated hang-out space. Also, think about if you need a workable space like an office, or a workshop to put to use.

Odours

Look for any odd smells that resemble earthy, musty odours – this could point to a problem with water damage and mold. Also, check for water stains on ceilings, dark patches around furniture on floorboards and check underneath all the sinks. Mold not only indicates water damage and flooding issues, but can also indicate underlying structural damage. Beyond the structural issues, black mold spores are dangerous to your health and costly to remove – a reason to avoid the home altogether.

Neighbourhood

The neighbourhood and your neighbours can play an integral role in your lifestyle and overall happiness when it comes to finding a new home. Look at the surrounding schools and local amenities to see if the area has everything you need. Also, look at the neighbouring properties to make sure you are not buying the best house on the block, with deteriorating properties around you. Lastly, check to see if there are any large, long-term construction projects nearby that will keep you up at night or disturb your peace.

Privacy

Take a good walk around the home and look for areas that hinder your privacy. Does the backyard have a fence that blocks out peering eyes? Can you see directly into your neighbour’s home? Can they see directly into yours? Privacy is something that is important and should always be considered as you look at potential homes.

Cracks and Structural Damage

If the bricks outside are showing long vertical cracks, or if the paint is chipping, and the roof shingles are curling, you may want to give the home a hard pass. Signs of early structural damage along the exterior and roof can end up costing you a lot out of pocket in repairs.

Storage

Often overlooked is the storage capacity of a home. The design, location and layout may all be in line with your style, but if there isn’t enough storage to make that move practical, then it might be worth continuing your search. Inspect all the closets and areas that are available offer ample storage options. Consider that as you and your children get older, you obtain more belongings and you’ll need room to accommodate all your items. Always keep storage space in mind during the open house tour.

House hunting can be a fun and exciting adventure, but it can be overwhelming when you don’t really know what to look for beyond the stunning staged design. Knowing the important things to pay attention for when you view a home will help you feel confident in finding the right price for a house that is suitable for you and your family, while avoiding any hidden surprises.

Own Your Getaway: Vacation Home Mortgages

 

Have you been dreaming about owning your own vacation home? Maybe a place you can spend the weekends relaxing lakeside or maybe even skiing at your own chalet?  Well it’s easier than you think to turn that dream into a reality, thanks to vacation home mortgages. With the right financial advice and guidance through the process, you can find the right mortgage for your needs. So, if you’re interested in finding out how you can secure a vacation home mortgage, read on as we give you all the tips you need to find your perfect getaway home.

 

Pre-Approval Process

The first step is navigating through the pre-approval process. Without a pre-approval, you won’t have a clear understanding of how much you can afford to pay on a second home. A pre-approved mortgage is the best way to know your affordability level, the interest rate and amortization period, what your estimated mortgage payments will be, and your overall financial status. A pre-approval also ensures that when you find the perfect home, you can put in an offer right away, giving you a competitive advantage over other purchasers. Here’s the best part of the process; applying for pre-approvals cost you nothing. Just remember to have all your financial information organized for the application process.

 

Qualification

With all of this years’ changes to the Canadian mortgage landscape regarding qualification requirements, it’s wise to talk to a mortgage professional in advance. At The Financial Form, we understand how the new mortgage changes can impact how you qualify. We’ll help you navigate through the entire process to ensure you are provided the best mortgage option to secure your vacation home.

 

Property Considerations

Selecting the right location and property can often be challenging because it’s not the same from one place to the next. For instance, not all municipalities will allow you to out right own the title to your property, and some have much higher taxes than others. Also, if you’re considering turning the property into a vacation rental, you’ll need a professional who can help show you where the most profitable locations are in the neighbourhoods, and whether the property – if condo or townhome, allows rentals in their units. So before making any decisions, let an expert help you navigate through some of the more difficult factors to vacation home purchasing and obtaining vacation home mortgages.

You deserve to have your dream vacation home, and deserve a team that’s dedicated to helping you reach your goals. We have assisted hundreds of people just like you to obtain second homes used as a getaway home. Together, we can ensure that you are offered the most affordable vacation home mortgage rates, so you can obtain the home you’ve been dreaming of.

Ready to get started searching for your getaway home? Contact us today to get started.

 

What Is a Bridge Loan?

 

When it comes to financing, there are lots of different types of loans available. One common loan is a bridge loan, also referred to as bridge financing, gap financing, interim financing, or a swing loan. If you’re looking to upgrade to a new home and have not yet sold your current home, a bridge loan may be exactly what you need. To find out more about bridge loans, read on as we outline how a bridge home can help you.

 

Bridge Loan Uses

A bridge loan is a short-term loan that is used to borrow money against your current property to help finance the purchase of another property. If you’re pretty certain that your home won’t be closing at the same time that you purchase, it will help you by bridging the gap of time between when you sell your old property to when the new property is purchased.

 

Financing Terms

Although this loan is often good for a six-month period, you may be able to extend a bridge loan for up to 12 months. And because it is a loan that is in addition to your mortgage, it carries a higher interest rate. You can expect to pay an interest rate above the average fixed-rate and additional fees set by the lender.

 

How It Works

A bridge loan can be opened as a second or third mortgage to be used as the down payment for the new property. Just be certain you can afford the extra mortgage, as you will still need to make the regular payments on your old mortgage. Alternatively, it can also be used to pay off any existing liens and the excess amount can be used as the down payment. With this method, you won’t need to make payments on your bridge loan but instead, use the proceeds to pay for the bridge loan once your house sells.

 

Potential Risks

With this type of loan, financing costs are higher so they should only be used primarily as short-term solutions and not long-term financial solutions. As a borrower needs to pay the loan more quickly, there may be additional fees and penalties on late payments. Plus, some lenders may have prepayment penalties, where you would need to pay them if you sell and want to pay the loan back too early. So, to avoid penalties or additional fees, it is recommended to talk to your mortgage broker in Vaughan who can help direct you to the best bridge loans available on the market that match your requirements.

If you believe that a bridge loan can help you, talk to The Financial Forum. Our qualified mortgage brokers can provide you with all the information you need and the deals that are available to you.

www.thefinancialforum.ca

Have questions? Contact us!

 

What are the Advantages of Pre-Qualification?

 

When it comes to buying a home, not knowing your budget or how much you will be granted for your mortgage can affect your purchasing power. Mortgage pre-qualification is a key step that every home buyer should do before they start placing offers. So, if you’re not familiar with all the advantages of a pre-approved mortgage, read on as we help you understand how you can get ahead of your competition and avoid costly mistakes from the get go.

 

Helps You Negotiate Better

What could be worse than finding that dream home, putting in a bid, and then being rejected by the lender or offered a much lower loan amount than the purchase price? Instead, you should know what amount a lender will loan you in advance. Securing pre-qualification ensures that you are provided with a set loan amount that is guaranteed for a specified amount of time. This will help you negotiate better and get the documents ready faster, beating out your competition.

 

Shows That You’re Serious

A pre-approval will show your realtor and seller that you are serious about buying a home. And when it comes down to you and another bidder, your offer will be stronger than one from a buyer without pre-approval. It tells the seller that they don’t have to worry about the financing falling through, which is an important advantage.

 

Ensures You Close Faster

When you set out for a pre-approved mortgage, you are required to provide your financial details to the lender. All the supporting documentation you provide for pre-approval is also required as part of the closing process. This allows for a much faster closing and can help a seller choose you over your competition knowing they will have the deal done in a shorter timeframe.

 

Provides Protection Against Rising Interest Rates

When you have a pre-approved mortgage, you are locked into a specific interest rate for a certain amount of time. This can protect you from any rising interest rates that can happen in the near term. Even if rates rise you will be still given the rate that is outlined in the pre-approval. And even if the rates fall you will be given the best rate possible.

In today’s market, going house hunting without a pre-qualified mortgage can result in pure disappointment. Don’t get beat out on every bid – talk to your Toronto mortgage broker today about the process for getting a pre-approved mortgage.

www.thefinancialforum.ca

Have questions? Contact us!

PSST – Do You Know About the Home Buyer’s Plan?

 

Being a first-time homebuyer isn’t easy in today’s real estate market. Many feel the pinch of the down payment and qualifying terms more than those who have already owned a home.  Luckily for all first-time homebuyers, there is a federal government program called the Home Buyer’s Plan that can help free up funds to finance the down payment. The plan allows you to use your RRSP savings to help you get into a home. To find out more, read on as we outline everything you need to know about the Home Buyer’s Plan.

 

Eligibility

Under the Home Buyer’s Plan, you are eligible to withdraw up to $25,000 of your RRSP when you qualify. To be eligible, you must be a Canadian resident at the time of the withdrawal, have a written agreement to buy or build a qualifying home, and not have purchased a home in the last four years. Plus, the first year that you withdraw from your RRSP, you must intend to live in the home as your primary residence.

 

Ineligibility

On the other hand, if you or your partner has owned the home for more than 30 days prior to the RRSP withdrawal, or you have a remaining balance from a previous Home Buyer’s Plan agreement, you will not qualify. There are also certain types of RRSPs that may not be eligible such as locked-in RRSPs. To find out if you can meet the qualifications you should talk to your financial institution or to a professional mortgage broker.

 

Starting the Process

Once you have met the necessary qualifications, you can start the process by completing a Canada Revenue Agency T1036 form. Once you have filled in all the applicable sections, you will need to bring the form to your RRSP holder who will finish the process and release the funds to you, tax free.

 

Filing with Your Taxes

Each year during tax time, you will receive a tax slip outlining the amount you have withdrawn. You are required to file this with your income tax return and complete the relevant sections. We recommend you talk to a financial advisor or accountant to ensure you process the information correctly before proceeding.

 

Repayment

Repayment for the Home Buyer’s Plan is easy. Starting two years after the amount has been withdrawn, you will have 15 years to repay back your RRSP without incurring any taxes. The payment schedule will be based on a yearly repayment plan set out by the Canada Revenue Agency. If you are unable to pay the amount required in any given year, the amount will be added to your income as taxable income and you will be required to pay the taxes. Just note that any repayment amount you make will not affect your yearly contribution limit, You could contribute towards your RRSP for the year as per normal.

The Home Buyer’s Plan can help all new, first-time home buyers get into the market and into a home more easily. If you’re ready to purchase a new home, talk to your mortgage broker with The Financial Forum for more information about the services available to you and whether you qualify.

www.thefinancialforum.ca

Have questions? Contact us!

5-Concerns-New-Home-Buyers-Have

Buying a new home can be an exciting new chapter, but it can also throw some stress and fear into the mix as well. Since it’s likely the biggest investment you will make in your lifetime, you want to ensure that you know everything required to make good choices. But you can take comfort in knowing that you are certainly not alone when it comes to feeling nervous about buying a home. Here we present the five biggest concerns for new home buyers and how you can overcome them.

Am I Buying the Right House?

With so many options when it comes to housing types and neighbourhoods, many buyers get caught up in fear that they may be missing out on better opportunities. If you don’t have a real estate broker who has access to all the market listings, your fears may be well placed. But if you are well represented by an expert, and have found your perfect home – something you love in your price range and desired neighbourhood – odds are you are just getting cold feet.

Can I Afford This?

Concerns about affordability are a rational fear when it comes to home ownership. And if you’re not properly informed about the other costs associated with purchasing a home you could put yourself in debt. The best way to combat affordability concerns is to get a pre-approved mortgage and talk to your mortgage broker about creating a budget around the down payment, closing costs, and other on-going costs that are associated with home ownership.

Is Now the Right Time to Buy?

Real estate market fluctuations, housing bubbles, and external market sources can all heavily impact the current and future real estate market and often with little notice. So it’s common for you to feel some concerns over whether now is the right time to buy. Talk to your mortgage advisor and take into account interest rates, and consult with your real estate agent about the market and you’ll have all the information you need.

Does This Home Meet My Future Needs?

Many people fear that the home they will buy now may not be able to serve their needs a few years down the line. And the concern that you may have to sell at a lower price than what you purchased in order to buy a larger home is a justified fear. That’s why it’s important to consider your future goals and plans, especially around family size, before purchasing your first home.

Will I Be Able to Qualify for a Mortgage?

With all the new rules in Canada surrounding mortgage qualifications, many people worry that they will not be able to qualify for a home in today’s housing market. But there are other options available other than just the traditional lenders. A mortgage advisor can help you find the right financing options for your financial situation.

Talk to us and we’ll walk you through the whole process so you can feel confident that you’re making the right choice when it’s time to purchase your first home.

Have questions? Contact us!

Are-You-Ready-to-Buy-a-House-on-Your-Own

Are you looking to buy a home on your own? If so, then you should know about the risks and benefits associated with solo home ownership. And regardless of what you have heard, it doesn’t have to be daunting going at it solo. Read on as we help you know if you’re ready to buy a house on your own.

Risks of Solo Home Ownership

Higher Associated Costs

When looking to buy a house solo, you should also consider the costs to maintain and manage the property. You’ll want to ensure you have enough money to cover the yearly property taxes, monthly utility bills, insurance, and a contingency budget for basic maintenance, upkeep, and emergency costs beyond the mortgage payments. Talk to a professional who can help you create a budget that is in line with home ownership expenses so you know exactly how much you can afford.

Resale Value

Many solo buyers in today’s market are purchasing condos or small townhomes. If your sole purpose of ownership is to sell the home within the next few years to make profit, be certain what you buy will have a decent resale value. The resale value on condominium and townhomes are usually much less than homes with land potential.

Full Responsibility

If you’re going to be the only one living in the home you’re also going to be the only one responsible for all the chores, cleaning, and maintenance. Make sure you can manage the home before you purchase. And if you aren’t ready to climb up on the roof to clean the gutters or handle the yard maintenance then consider looking at a condominium or townhouse with included maintenance.

Benefits of Solo Home Ownership

Rental Potential

Buying a home solo often allows for some rental potential. Fill up those spare bedrooms or basement with a tenant and you could be making money to pay off your entire monthly mortgage payments.

More Selection

As a solo home buyer, you don’t have to consider the same factors as families, such as best neigbourhoods for schools. You can live in areas that parents aren’t fighting for and where there is less competition and better pricing.

Only You Make the Decisions

There’s no other opinion to contend with except for your own when deciding what your dream home is, how much to spend, and how to decorate it. All the choices are completely your own.

Whatever your home ownership dreams and budget are, talk to your mortgage broker at VERICO The Financial Forum to explore your options. We can help you better prepare for all aspects of home ownership and connect you with better mortgage options.

Have questions? Contact us!

Looking to buy a home with your common-law partner or significant other outside of marriage? There are things you need to know before buying a house before you’re married. Homeownership is one of the biggest financial investments you will make in your lifetime. So, it should be treated with careful consideration when deciding. Here we break down five things you should know before buying a home with your partner:

The Law is Not Clear Cut

When a married couple purchases a home together, they have specific laws that outline their rights during and after ownership, as well as if they get divorced. For unmarried partners, the law is less clear-cut when it comes to breaking the co-ownership agreement.

Your Finances Need to be Evident

Before entering an agreement, you both should know every detail about each other’s financial situation. This includes all debts, the number of credit cards, credit rating, and previous financial history. This will become very important in the mortgage qualifying process as you will need to provide all the figures to the potential lender. And bad credit history could really affect the conditions of your loan, so understanding one another’s finances can help you to come up with a plan beforehand.

Adequately Review your Options

An unmarried couple will have three choices to choose from when purchasing a home. The first option is where one of the partners can hold the title as the sole owner, which is good for when one of you has bad credit history that would affect the purchase. Another choice is for both of you to hold title as joint tenants. If you want to own the property equally with rights to use the entire property, and in case of death, that property would be passed on to the other partner, then you will want to use this option. The last option is to hold title as a tenant in common, which involves deciding on a percentage of the property that each of you would hold. In case of death, the interest passes on to whomever is specified in the will, and if there is no will then the house will pass on to the next of kin.

Obtain a Co-Ownership Agreement

To protect each of you financially you should also enter into a co-ownership agreement. This will work to protect you in case the relationship dissolves. Plus, it can help to address how the mortgage will be paid, who pays for what, and what will happen if one person is unable to meet their end of the bargain.

Monitor and Record all Costs

If a relationship dissolves, you may want to take possession of the items you’ve paid for. Keeping track of who pays for what will help you prove what is owed to you if things do not work out.

Always consult with a lawyer before you enter into a contract with your partner if you are not married. Having someone help guide you through the process and give a clear explanation of your rights can help you in any homeowner situation.

Have questions? Contact us!

How Do You Know If You’re Ready to be a HomeownerAre you ready to buy a home? It’s an exciting time, but it also represents the biggest financial commitment you may ever make. That’s why it’s important to be fully prepared and informed. Having the right amount of funds available before and after can make all the difference, while also ensuring that you bite off more than you can chew financially. Here we look at some important factors at play that will help you decide if you are truly ready to purchase your first home.

You have an appropriate down payment

The more money you borrow, the more you must pay back. Saving up for a conventional 20% mortgage can help you pay off your mortgage sooner and save big money over the years to come. Anything less than 20% will also require that you take out mortgage lender Insurance through a provider such as CMHC or Genworth. Though you may be able to buy a home sooner with a lower down payment, mortgage insurance premiums will be looped into your monthly payments. If it suits your financial picture, it’s always better to save toward a higher down payment.

You can afford the closing costs

Many people do not factor in the closing costs that come with purchasing a property. From legal fees to land transfer tax, property insurance, statement of adjustment costs, and PST on your CMHC insurance, you can become completely blindsided by expenses if you are not prepared. Having the money ready to cover your closing costs is essential. A good rule of thumb is to put aside 1% of the purchase price toward these fees and expenses.

You have enough money for surprise hidden fees

Having maintenance costs as soon as you walk through the door can be a horrible surprise, and when it happens, you need to have some pocket cash to take care of the expenditures. For starters, don’t forgo the home inspection. This can help you renegotiate the purchase price if you find any structural issues during due diligence. Even with a successful home inspection, however, you’re likely going to want to make changes to the home, whether it’s painting the nursery or purchasing new high-efficiency appliances.

If you are planning a renovation or purchasing a fixer-upper, a Purchase Plus Improvement Mortgage might be a great fit.

You have savings for capital improvements and repairs

Many people don’t plan for yearly repairs and potential capital improvements when they buy their first home. Having some money set aside for small projects such as painting, HVAC cleaning, lawn care and driveway paving is wise. Depending on the condition of home, improvements such as a new furnace or replacement roof may be needed in the next decade.

You have researched the market trends

Knowing if it is the right time to buy is important. Learning the historical trends of your market can help you make the right investment and not overpay. If you don’t have industry knowledge, it will work in your favour to hire a real estate agent that has the experience and skills to negotiate for you.

Purchasing a home can be an exciting time, but don’t get caught up in the thrill without knowing what is involved with ownership. Ensure you have the right amount of savings and knowledge to buy and live comfortably in your new home. The Financial Forum can advise you of your options and help you find the right mortgage solution.

www.thefinancialforum.ca

Have questions? Contact us!

I am not an economist, but having been in the industry a while, I am an “observationist” and I do like to plan ahead for changing market conditions. The so called “Trump Factor” is no different and if you are in the real estate market or plan to be, you should be considering the impact as well.

Now that he has been sworn in as president, it does not matter if you excited about the new president or totally upset, the fact is there will be many changes in many areas, and the real estate industry is no different.

What’s Happened So Far?

Well, mortgage rates are primarily affected by up and down movements in the bond market. Why? Because most mortgages are packaged as some type of bond transaction and sold to investors. Bottom line is that most expected Hillary to win the election. The upset victory by Trump resulted in an initial drop in the markets and then the stocks rebounded and kept going. As stocks climb, bonds usually dip due to a bond sell off.

So, we have seen a substantial change after the election. Mortgage rates did rise slightly but have since tapered off.  The bond market sold off when the stock market popped up because of optimism that the economy would get better.

Also, if Trump’s platform holds true, he is going to increase fiscal spending and invest in infrastructure. If this happens in conjunction with interest rates and monetary policy, this will lead to growth, new jobs, more money circulating, etc. Higher growth means rising prices (inflation). Inflation means higher interest rates to curb inflation and the viscous circle will begin.

Where will the economy be in 3, 5, 10, 15 years from now. It’s an educated guess at best. But if growth is in fact higher, rates will be as well.

Still, we must keep in mind that even if the prime rate does start to rise, there is no guarantee that longer term mortgage rates will rise as the prime is affected by the Bank of Canada and mortgage rates are affected by bond rates.

Ok, so what does this mean?

Bottom line, is it’s not clear or predictable yet. A lot still depends on if rates go up and by how much. Slight increases won’t change consumer or lender mentalities that much. However, a substantial increase would have a real impact.

In addition, I have not discussed the impact of the mortgage rule changes late last year, and although that is not the purpose of this writing, it cannot be discounted and these rule changes can affect interest rates and the market as a whole.

So, what to do is be prudent as always. If Trump succeeds, the US economy should do better and that would result in higher wages, inflation, etc. Likely, higher rates south of the border. If there is spill over and our economy mirrors some of the impact, then you can expect the same here.

The markets, real estate included, are largely driven by consumer sentiment and emotions. Right now, real estate is the “thing to do” and in our market at least, expect things to remain positive with very attractive interest rates in the near future. Long-term, who knows. Regardless, real estate has had its ups and downs over the years. Land, brick and mortar always seem to be a good bet in the long run.

Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (905) 265-0246.

VERICO The Financial Forum Ltd.

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