Add value to your home with an addition

In an era of uncertainty surrounding home prices and the mortgage market, several home owners are looking to increase the value of their property by renovating. Kitchens, bathrooms and finished basements tend to be the most popular projects, but an addition can provide greater reward, if planned properly. A recent article from the Globe and Mail provides some helpful hints, and shows readers how adding to the home may be a better investment than simply relocating to a larger home.

As with any renovation, it is important to start with the proper research. The article suggests consulting a real estate professional in your area to find out what potential buyers are looking for. This information can be very beneficial when you decide on your expansion. The agent can also keep you informed on prices and recent sales, so you can stay within a reasonable price for your neighbourhood. It is also important to be honest about how much more time you plan to spend in the property. If you intend to sell shortly after completing the expansion, you will likely have a very different renovation plan than you would if you wish to spend 5 or 10 more years in your home.

If the idea of the research and costs of an expansion seems like too much, relocating may seem like an attractive option. This article includes a helpful chart to estimate the potential moving costs, making it easy to compare what will be the more feasible option for you.

To find out more about refinancing to renovate, contact a Canadian mortgage broker.

For the full article from the Globe and Mail, click here.

Officials expected to finalize lending guidelines by end of June, early July

The draft recommendations recently put forth by The Office of the Superintendent of Financial Institutions (OSFI) have been the subject of much recent discussion. The recommendations, released March 19th are to be finalized by late June or early July, and would significantly change the mortgage underwriting process.

Some of the proposed changes include:

• Reducing the maximum loan-to-value ratio for Home Equity Lines of Credit from 80% to 65%
• Lines of credit to be amortized, or amortized after a certain period of time, eliminating borrowers making interest-only payments indefinitely
• Stricter income requirements from the self employed
• The possibility to re-qualify upon renewal
• Disallowing the funds from a cash-back mortgage to be used as a down payment

After announcing the proposed changes and discussing with industry professionals, OSFI has chosen to relent on certain changes, most notably withdrawing the requirement to re-qualify upon mortgage renewal.

It is reported that these changes are an attempt to moderate consumer debt growth without raising mortgage rates, however, implementing all of the proposed regulations simultaneously would likely have a negative impact on potential borrowers, making obtaining financing more difficult. The changes are also fuelling an increase in the number of borrowers seeking advice from professionals, such as Mortgage Brokers, who have access to multiple lenders and mortgage solutions for individual financial situations.

For more information, contact a qualified Mortgage Broker.

Click here for the full article from the Vancouver Sun.