Wednesday 6 November 2013

What to look for in your home inspection

Whether you're buying your new home from a builder, or from a previous resident, a home inspection is a must before signing the mortgage papers. Hiring a qualified home inspector should be the first step, but there are things you can check independently as well. Below is a list that can be completed by any potential home buyer during a property walk-through.

Inspecting the grounds:
  • Check for proper grading for drainage, and evidence of standing water.
  • Ensure walkways, fences and any exterior structures, including railings, are in good condition.
  • Look for cracks in the foundation and any damage to the siding.
  • Windows should be properly sealed, and in good condition.
Inspecting the home's systems:
  • Find out where the home's heating system is, review the operation, and check furnace filters.
  • Locate the electrical panel and check individual breakers.
  • Ensure all bathroom electrical outlets are equipped with the proper GFCI circuit interrupters.
  • Locate the main water supply shut-off valve, and the shut off for any exterior water supply to prevent freezing in the winter.
  • Locate smoke and carbon monoxide detectors.
Inspecting the interior:
  • Check plumbing fixtures to ensure proper operation.
  • Check basement for signs of moisture damage.
  • All doors, locks and latches should be in good working order.
  • If the home has a fireplace, ensure it is clean and operational.
Inspecting the kitchen:
  • Exhaust fan should be in working order and vent to exterior.
  • Check that all appliances are operational.
  • Look for any signs of leakage under sinks.
Remember - before finalizing your purchase, a walk through from a licensed home inspector is a must. However, performing a few of these checks yourself beforehand can help narrow down your property search.

Keep in mind, no home will be perfect. Professional home inspections are developed to be extremely cautious, so chances are your inspector will find some fault with the property. This is one of the major reasons to ensure you are present during the inspection so the inspector can explain any issues, rather than simply reading about them in the report later.

Thursday 3 October 2013

How the self-employed can get organized

Regardless of what sort of business you run, paperwork, receipts and tax records are bound to pile up. Combining these with your own personal financial paperwork can be an administrative nightmare if it gets out of control. Then, when tax time rolls around, or you're looking to apply for a mortgage
 finding the right paperwork can be overwhelming. In this article from Moneysense, Gail Vaz-Oxlade shares some helpful hints for self-employed individuals.

  • Keep all receipts for business expenses in one place. Filing them as soon as they are received will cut down on lost receipts.
  • Consider keeping a notebook in the car to record information on business trips, including dates, purpose and total kilometres.
  • Keep personal and business banking separate, eliminating any question regarding which expenses are which, come tax time.
Click here for the full article from Moneysense.

Wednesday 4 September 2013

How landlords can steer clear of bad tenants

Real estate investing is becoming increasingly popular, and can be extremely lucrative. Purchasing a property and having tenants pay the mortgage can be a great way to invest. However, one of the main reasons potential landlords leave the business is by making the mistake of renting to a bad tenant. Finding good tenants is key to making your rental business work, and fortunately, there are simple methods to screen potential candidates that can minimize the chances of selecting the wrong ones.

The first step to finding a good tenant is a detailed rental application. These forms can be found online and easily completed. A good application should include the applicant's job, the name of their supervisor, income, current address, references and referral source (if applicable), government issued identification, and any other details you feel will be relevant to the approval process. Not only does this document give a landlord a snapshot of their potential candidate, it gives helpful information for a landlord to track the tenant down if need be.

Once a tenant is chosen, a move-in inspection report is a must. This document is often neglected, but can prove extremely useful. By conducting a thorough inspection with the tenant upon move-in, any damage when the tenant vacates is clear. Most provinces require this document, which must be shown before any funds are deducted from a security deposit.

Finally, a residential tenancy agreement must be filled in and signed. The tenancy agreement contains names, addresses, rental amount and all other pertinent information. Addendums can be made to the document for additional guidelines such as allowing or disallowing pets, smoking or penalties for late payments.

For more tips to help landlords find exceptional tenants, read the full article here.

Tuesday 18 June 2013

What qualifies as a good credit score?

Your credit score is becoming more and more important when it comes to applying for a mortgage, so staying informed about your report and its contents is key. The major credit reporting firms in Canada, Equifax and TransUnion, both allow you to view your report immediately, for a fee. However, both firms also offer your report free of charge, provided you request it in writing.

So what qualifies as a good credit score? Scores normally range from 400 to 900. Scores that start at 600 are good, anything over 750 is considered excellent. Your score is dependent on what credit you have, and your consistency with paying it back. Your credit score changes when your credit behaviour changes. For instance, if you apply for a new credit product, miss a payment or make a late payment. Having many different credit products that are all close to or at the limit can be detrimental to your credit. It is also important to be mindful of credit cards you no longer use that have no outstanding balance, especially if they have an annual fee. Neglecting to pay the annual fee on a card you have forgotten about will very quickly damage your credit. Checking your report for erroneous information can also be beneficial. Mistakes in your name or address can cause incorrect information to come up in your report, which can damage your score as well.

For more tips on controlling your credit, consult a professional Mortgage Broker.

Click here for the full article from the Globe and Mail.

Wednesday 29 May 2013

Canadians best-off in housing, third overall in a new quality of life survey

A recent survey conducted by the Organization for Economic Co-operation and Development (OECD) comparing industrialized nations ranked Canada as the third overall best place in the world to live, using 24 different factors, including jobs, income and overall "life satisfaction'.

Canada came in third overall in the survey, results of which were released on Tuesday, and we learn that with an average of 2.6 rooms per person, Canadians come in first in the housing category, making it a great place to get a mortgage. Canada was also reported as having the fewest assaults, making it one of the safest places to live.

The OECD's profile of Canada states that "Canada performs exceptionally well in measures of well-being, as shown by the fact that it ranks among the top countries in a large number of topics in the Better Life Index". The profile goes on to say that "in general, Canadians are more satisfied with their lives than the OECD average, with 82% of people saying they have more positive experiences in an average day than negative ones".

Click here for the full article from the Financial Post.

Wednesday 22 May 2013

Mortgage challenges for the self-employed

For many Canadians, proving their income to a Mortgage Broker or a lender for the purpose of obtaining a mortgage is as simple as providing T4 slips. For the self-employed, the process is more complicated than that. Self-employment is steadily becoming more and more common in Canada, and many who report only to themselves are becoming very financially successful. However, with fewer ways to prove income, lenders will still tend to proceed with caution when faced with a self-employed client.

Following the introduction of new mortgage legislation last summer, the screening of potential applicants has become more detailed. From analysing the income for the applicant based on the average income someone in their field would make, to assessing the length of time their particular operation has been established and carefully examining the income reported to the Canada Revenue Agency, it is a detailed process. Thankfully, there are several things that can be done to ease the process.

  • Pay down debts, increase savings and check your credit. Lenders will want to see that you have a good credit score, and the ability to service any debts properly. Clients with several high-interest credit products and little savings are typically viewed as much less desirable candidates for a mortgage.
  • Be prepared. It is suggested that you accumulate 3 years of tax documentation showing your reported income. Your business license, articles of incorporation, and client contracts are also important documents to have on hand.
  • Consult a professional Mortgage Broker. Navigating the waters of mortgage lending isn't always easy, especially for those who are in business for themselves. A Mortgage Broker will do the navigating for you, negotiate with lenders, and find a mortgage that is the perfect fit for you.
Click here for the full article from the Toronto Star.

Wednesday 8 May 2013

The language of selling houses

In an increasingly competitive housing market, the first impression potential buyers will have of a given property is extremely important, and the property listing is a big part of that. Professional photos and a descriptive write-up are a good way to draw potential buyers to your property. Many will be searching for properties online, and if the listing doesn't make an impact, it could simply be passed over in favour of another. A recent study from Point2Homes analysed 40,000 property listings Canada-wide to compile a list of keywords that are most often used to attract potential buyers, yielding some interesting results.

One of the most common terms used in descriptions of Canadian homes is "hardwood floors". "Beautiful" ranked high on the list, as well as "huge", "perfect" and "quiet". Homes in Saskatchewan are commonly referred to as "spacious", while Ontario homes talk about electric light fixtures. The study also showed how Canadian listings differ from the U.S., as a Canadian listing is likely to mention a home is close to schools, while an American listing is more likely to advertise that the home is priced to sell, or mention add-ons like a pool.

Click here for the full article from the Ottawa Citizen.

Wednesday 17 April 2013

The purchase plus improvements mortgage

When shopping for your dream home, it is sometimes difficult to find a property that suits all of your needs perfectly. You may find a place that's in the perfect neighbourhood, close to work and schools, and it's everything you were looking for, except for one thing. Perhaps you want to update the kitchen, or install hardwood floors or new windows. Obtaining a purchase plus improvements mortgage can be the best solution in this case.

The purchase plus improvements mortgage allows a borrower to purchase a property and include home improvements in the cost. Basically any renovation that will increase the value of the home can be considered. In order to apply for a purchase plus improvements mortgage, you must obtain quotes for the improvements you plan to make, and submit them along with your mortgage application. The mortgage will then be approved for both the cost of the home and the renovations together.

Some advantages of purchase plus improvements:

  • Can be done whether or not the purchaser has 20% down.
  • Eliminates the need to seek other financing, perhaps at higher interest rates, after the home is purchased to make improvements.
  • Opens up more options when looking at properties.
For more information on obtaining a purchase plus improvements mortgage, talk to a qualified Mortgage Broker.

Friday 22 March 2013

Best places to live in Canada

Moneysense magazine recently released their annual list of the top cities to live in Canada. Not only do they rank the top cities overall, there are also rankings for top cities to raise a family, top cities to retire and top cities for new immigrants. The magazine takes into account several factors, from quality of weather and access to hospitals, to job availability and housing affordability. Cities with affordable housing when compared to local salaries ranked higher, as did cities with low crime rates and those with easy access to medical treatment.

Also included are individual articles about the top ranking cities and what makes them great, along with details on how cities were chosen, infographics, and an interactive map of a virtual "perfect" city.

Where did your city rank?

Wednesday 20 March 2013

Have tougher mortgage rules created stronger borrowers?

In their latest public statements, the Bank of Canada has been much softer with their language when it comes to Canadian debt levels, signalling that they are less concerned than they once were about the possibility of a U.S. style housing crash. In this video from the Globe and Mail, Tara Perkins talks to Andrew Charles, CEO of Canada Guaranty (one of Canada's major mortgage insurers) and Benjamin Tal, Deputy Chief Economist for CIBC, about the likelihood of tougher mortgage regulations creating a culture of stronger and more educated Canadian borrowers.

The stricter mortgage regulations introduced in the summer of 2012 included decreasing the maximum amortization period for insured mortgages to 25 years from the previous 30 year maximum, limiting refinancing loans to 80% of the value of a home, and limiting the maximum gross and total debt service ratios.  These new regulations, Charles suggests, have caused many Canadian first-time buyers to "sit on the sidelines", thus resulting in better credit and more qualified, stronger borrowers. He went on to say that the majority of borrowers are opting for a 5 year term, giving them 5 years of certainty when it comes to mortgage payments.

The trio also take some time to discuss mortgage rates. Those who view the mortgage market in a negative light tend to believe that low mortgage rates will spur a wave of unnecessary borrowing - Tal disagrees. He goes on to say that when rates eventually do rise, it will not be a dramatic increase and we are unlikely to see a wave of delinquency like the U.S. did.

Click here to watch the full video from the Globe and Mail.

Thursday 14 March 2013

Mortgage shopping has never been easier

For those getting ready to purchase their first home, renew an existing mortgage, or refinance to take advantage of existing equity, saving money on interest is the easiest it's ever been. The Internet gives us a wealth of information, right at our fingertips, including where to find qualified mortgage professionals to assist with finding the right mortgage.

A recent report from Google found that when one of the major Canadian banks announced a new low mortgage rate, searches for the term "mortgage" increased by 50%. With spring well on the way, Canadians are getting ready to start hunting for that perfect property, and the perfect mortgage to go along with it. Ask any Mortgage Broker and they will tell you a low mortgage rate is important, but they will also emphasize you need to choose the mortgage with the right terms for you. Discounted rates are great, but if you're looking to pay your mortgage aggressively and the mortgage with the low rate doesn't allow pre-payments, you've likely chosen the wrong mortgage. This is just one of the many reasons Mortgage Brokers are rising significantly in popularity. A study from the Canadian Association of Accredited Mortgage Professionals (CAAMP) reported that 47% of Canadians who took out a mortgage in 2012 consulted a Mortgage Broker. However, only 27% of those renewing a mortgage sought the advice of the same professionals. After a 5 or 10 year term, your needs are sure to be different than they were when you first signed your mortgage, so why not consult a professional, even to simply ensure the terms and conditions of your existing mortgage are still suitable, especially when the service they provide is of no cost to you?

Click here for the full article from the Financial Post.

Thursday 28 February 2013

How to avoid costly mistakes when filing your income tax return

Income tax time is in full swing, and the question that remains top of mind for Canadians is how to maximize their refund. What many don't realize is that there are many small details that can be overlooked and end up costing more in the end. The following will show how to avoid making these common but somewhat costly mistakes when filing your annual income tax return.

Organization is key when it comes to planning for tax time. Rosa Iuliano, a chartered accountant with Collins Barrow Ottawa, suggests making a file at the beginning of the year, and filing all receipts, large or small, when they are received. This will ensure nothing is forgotten when it comes time to file. Failing to include income can cost much more than the time it's worth to find the paperwork. The Canada Revenue Agency does perform spot checks, and failing to report income can incur a penalty of as much as 10% of said income. Filing late is another misstep that can cost you big. Filing late causes penalties of 5% of anything that is owed and an additional 1% for each subsequent month until filed. If you fail to file within a three year time frame and were eligible to a refund, your refund can be denied.

Another common mistake many Canadians make is to overlook ways they can use their tax refund to make money. Some of the expenses most commonly overlooked are: charitable donations, out of country medical expenses, moving expenses (when moving at least 40 km closer to your place of work or school), home maintenance costs if your office is in your home, and child care expenses. Consult a tax professional for even more tips, and to make the most of your annual tax refund.

Click here for the full article from the Ottawa Citizen.

Tuesday 12 February 2013

The return of the first-time buyer

Traditionally, January and February are seen as slightly slower seasons for real estate. However, Real Estate Agents and Mortgage Brokers are noticing an increase of clients house-hunting and looking to obtain mortgage pre-approvals. Many of these clients are first-time buyers, who stepped back from the housing market last summer when new mortgage regulations were introduced. The regulations, including shortening the maximum amortization period on insured mortgages to 25 years, were an obstacle for several first-time buyers, but as 2013 gets rolling, a stronger real estate and mortgage market seems to show that these buyers have had time to save a little more and are looking to try again. The Toronto Real Estate Board  is reporting a favourable start to the year. Sales are down 1.3% when compared to January 2012, which is a positive change following months of double-digit decreases.

Click here for the full article from the Toronto Star.

Thursday 24 January 2013

Secrets to finding a good handyman for your reno

The housing market is anticipated to experience an upturn in 2013, so it is certain that many home owners and real estate investors will start looking to renovate, add property value and put their houses on the market in the upcoming months. As there are always some jobs that simply require a professional, the following is a guide to what home owners should look for when hiring a handyman.

Before getting started, it is a necessity to decide what type of professional you are looking for. A handyman is very different from a general contractor. Neither are required to have a specific trade license, but a contractor is hired to find a variety of licensed tradespeople. If the job is larger and in need of professionals of varying skills, it is likely better to hire a contractor. For small jobs, a handyman is likely the way to go. Talk to friends, family or neighbours for recommendations, or check Home Builders Association websites for "RenoMark" contractors, who are members of the Canadian Home Builders Association and must adhere to their code of ethics and conduct. If you're hiring a contractor, it is a good idea to ask for at least three references. If the contractor is licensed, ensure it is not expired, and ask if they have insurance coverage. If the contractor is not insured, you can either request they purchase temporary insurance or go to a lawyer and draft a general release to ensure they understand they are responsible for any damage and / or accidents on your property. This releases you from any liability.

If you hire someone based on a referral, it is a good idea to ask a few questions before accepting their recommendation, including what jobs they performed, if they started and finished on time and on-budget, if there were any issues, if the referrer would use their services again and if they are receiving some sort of compensation by referring the professional. It is recommended to interview three potential candidates and ask for estimates from each. That said, it is always important to set aside a little extra to be prepared for any unforeseen circumstances.

The contractor will provide you with a detailed contract, which should include not only a detailed description of the work that needs to be done, but also permits, supplies, commencement and completion dates, terms of payment and a payment schedule, insurance details, legal information, dispute resolution and warranty information. The contract is vitally important, as it sets the expectations for the contractor or handyman. If there is any requirement for clarity at any time, it is in writing and can be referred to.

Click here for the full article from the Globe and Mail.

Tuesday 15 January 2013

Why you should re-key the locks in your new home

Receiving the keys to your new home is likely one of the most exciting parts of the home buying process. What many home buyers fail to ask themselves, however, is how many copies of these keys have been made in the past. Over the course of the previous owner's tenure, copies of keys may have been supplied to family, friends, caregivers or maintenance companies. This article from the Ottawa Citizen details not only the security benefits, but also the insurance benefits of having your home re-keyed.

Re-keying your home is an inexpensive and fast procedure that can give peace of mind, and other benefits as well. Most home insurance companies will expect that the locks in a previously-occupied home were re-keyed when the new owners took possession. If a client reports a forced entry, the insurance company will want to see evidence to be sure that neglect on behalf of the home owner was not a factor.

So how does one go about re-keying the locks in a home? Contrary to popular opinion, the locks themselves do not have to be replaced. A professional locksmith will simply disassemble the current locks and replace the pins and keys. There are two options to complete this process; removing the locks and taking them to a locksmith, or hiring a locksmith to come on-site to perform the procedure. In some newer homes, locks can be re-keyed without calling a locksmith. If the home was built within the past few years, it is recommended to ask the previous owner to find out if this is an option.

For more information and tips for first-time home buyers, contact a professional Mortgage Broker.

Click here for the full article from the Ottawa Citizen.