Canadians, buoyed by a budding housing market recovery, took on more debt in June as they tapped banks for a variety of loans tied to real estate, says a report released yesterday by TD Economics.
Total bank-issued credit to households grew by 1 per cent in June from May. On a year-over-year basis, household credit increased by 9.9 per cent. … Continue Reading
The Real Estate market is HOT, and this can put both the Seller, Buyer and Realtor in a hot situation. The Seller is expecting top dollar for there home, buyers are trying to get a deal, and the Realtors are caught in the middle trying to make the transaction as smooth as possible!
Here are a couple tips to keep in mind when you get into a BIDDING WAR!!!
1.Sit back and decide what your bets offer is, ” the value is in the eyes of the buyer, whatever the buyer is willing to pay will pay, even if its $30,000 over asking if they want to buy that home they will put the number on paper!”. Offering the highest price will make your offer more attractive and is a sure way to get the Seller’s attention. In most cases Seller’s who receive multiple offers only seriously consider those at the top of the price heap.
2. Show the Seller that you are a serious Buyer. Offer a large down payment or deposit, this will show the Seller your motivation.
3.Get Pre-Approved by your mortgage professional. Going in with an offer without a need of a financing condition shows the Seller your are financially stable and can afford this transaction. And you may want to even include your pre approval letter with your offer, so the Seller can see you are approved.
4. Do not add unusual conditions to the offer, you don’t want to complicate things. By adding more useless conditions this can act against you when your up in a bidding war. Try to avoid conditions such as ie: “Conditional on the sale of your home” etc this can act as a loop hole and be a way for a Buyer to get out of the deal. However do not exclude the standard conditions such as for home inspection or financing conditions, unless you know the risks that can come along with it.
MLS.ca is a fantastic way to start yourself into the Real Estate market. You get to see whats new and available on the market, check out photos and neat virtual tours.You are able to get information on different locations and neighbourhoods. Find out whats close by and what are all the hot attractions and entertainment hot spots.
The downside of the system is that is not updated on a regular basis.Some homes you may be viewing may have sold 3 months ago. Or a home you have your heart set on may have a had price reduction and you had no idea. This is why its a good thing to hook up with a REALTOR in your local area. They have there own mls system that is updated every minute of the day, if there a price reduction or any status change they will be the first to know!
Another great feature is the “prospect match” your REALTOR can set you up on this system where you will get a report almost everyday at midnight with all the new listings, and updated information, this will also save you lots of time instead of sitting on the computer looking through 20 pages of listings that are all outdated. All you need to do is sit down with your representative and outline your buying criteria( price range, # of bedrooms, parking,square footage, balcony etc). He/she will then input this into the system and you too will be the first to know of any changes. Its really easy and if you come across a listing you are interested in viewing, all you need to do is contact your real estate salesperson and give them the “MLS number”, they can pull this listing in a flash and book you a private viewing right away. This will also give you a good sense to what is out there in market and any activity.
So if your looking to purchase, find a REALTOR in local area and ask them to put you on a prospect match! With the help of a REALTOR you will be well on your way finding that dream home!
The mortgage process can be a stressful and sometimes frustrating process. The idea is to make the entire process go as smoothly as possible. What is most important? Be prepared before you sit down with your mortgage agent.
Here are some things you can do to help ensure successful results, as well as give you some control over your own loan process.
1. Take time to Straighten out your finances:
If you don’t have a grip on what’s coming in and what’s going out (and where, and why), you may be in for a rough time when you apply for a home loan.
2. Make sure to check your credit record:
Everyone’s heard the horror stories: Your best friend, your sister, neighbor, goes to buy a home only to discover the worst… that the credit report contains negative or inaccurate credit information. Instead of having a clean record, he or she has an $80,000 outstanding bill, that is not their own. The loan officer looks at the outstanding bill and gives you a choice: Clean up the credit problem or no loan. Some choice. And you’ve probably heard how difficult it is going to be to get your credit history cleaned up. Maybe so, but it’s important to try nonetheless.
Here’s what to do: First, order a credit report on yourself. You can contact Equifax By phone: (1 800 465-7166 ), or online at: www.equifax.ca
For less than $10, Equifax will send you your credit report. This is the same information lenders will receive. By getting a copy of your credit report before you apply for a loan, you’ll get a first look at any problems or discrepancies that have sprung up.
3. Gather The Information You Need Ahead of Time:
It’s a great idea to gather information ahead of time and organize it so that it’s easily accessible for you to review and have corrected. Now, you’ll also need complete copies of your past two or three tax returns plus a current pay stub, or a current profit and loss if you’re self-employed, you’ll be able to have that information on hand when you sit down with your mortgage agent.
4. Know The Current Lending Guidelines:
Get a current copy of the lending guidelines. If you are applying for a high ratio Mortgage, the federal Canada Mortgage and Housing Corp. (CMHC) must insure these loans. The protection is for the lender, not for you. Mortgage insurance can be expensive: it can range up to 2.5 per cent of the value of the loan. You have to insure the entire loan, not just the amount that is above 80 per cent of the purchase price. That means the insurance premium for a $140,000 mortgage would be $3,500. Most lenders will let you roll the insurance premium into your mortgage. If you do, though, you’ll end up paying a good deal of interest on the insurance fee as well.
One advantage to this type of financing is that CMHC-insured mortgages become open after three years. All that’s required to pay off your mortgage at that point is to pay a penalty of three months’ interest. (An open mortgage means you can pay it off or refinance at current rates at any point.)
5. CMHC’s 5 Per Cent Down Program:
If you are a first-time buyer, you can put as little as 5 per cent down with an insured mortgage — provided you earn enough income to qualify. The amount of money you can borrow under this plan depends on where the house is located. Contact CMHC for more information about your specific situation and location.
These loans must be insured, and while you can choose any term you wish, your income must be able to meet the payments required under a three-year term.
6. Choose a Conventional Mortgage:
Conventional mortgages require a down payment of 20 per cent of the home’s appraised value. If you’re looking at a house with a price tag of $200,000, that means you need to come up with $50,000 of your own money. But if you don’t have that much saved, you may still be able to purchase that property.
Although it may seem that the lender’s primary job is disqualifying mortgage applicants, the reverse is true: The lender wants to qualify as many applicants as possible (lenders make their money by approving loans) but are restricted by the rules and regulations of a larger, more powerful body.
If you understand up front what your lender is going through, it may help smooth the process.
7. Qualify your lender:
Just as you shop for a real estate broker and a new home, it’s very important to shop for a lender, your Mortgage Agent can help you. Loan products, services, style, and personal attention vary greatly. Look for a lender that is best qualified to meet your needs.
For example, if you’re self-employed, and you’ve only been self-employed for a year, you may find it more difficult, even though you may have paid every bill on time in your life. The reason for that is that lenders need to see that you’ve been self-employed, maintaining an income for at least two years, and have the tax returns to prove it. At this point, your choices would be to wait until you’ve been self-employed for two years, or go with a sub-par loan (also known as a B or C loan in the lending industry).
Established neighbourhoods tend to have their own personalities, mature trees and larger yards. Older building styles tended to lean toward higher, plaster ceilings, hardwood floors and decorative woodwork. Depending on the age of the home, it may require a little more maintenance.Established neighbourhoods are usually closer to the city. Urban living usually puts you at the centre of the action. It offers a wide variety of amenities like shops, theatres and restaurants. It may be closer to your workplace. Of course, the drawback of an urban location could be a smaller, older or more expensive home. Look for schools, playgrounds, parks, etc.
Make sure there are no undesirable areas surrounding your neighbourhood such as a garbage dump, industrious buildings disposing bad odours, etc. The suburbs usually have the advantage of newer homes, and more square footage for the same price as an urban location, but may not have the other amenities as close as you’d like.
New neighbourhoods tend to have a noticeable lack of foliage and can look barren for years as the landscaping matures. If you purchase a home or condo before it is built, you will be able to take advantage of upgrades during construction, and when you move in you can decorate to your taste.
A new home or condo won’t have the charm of an old one, but will have warranties covering most major components. Be careful in understanding what the warranty covers. New homes have some real disadvantages that most people don’t think of until it’s too late. It is important that the neighbourhood you choose to live in is well suited to you and your family. The following is a list of considerations and possible problem areas:
Environment – The quality of air, water and soil is a top concern as a polluted neighbourhood can be detrimental to both your health and property value. Ask your real estate agent, neighbours and local media about any known environmental issues in the area.
Appearance – The home or condo you are considering may be tidy and attractive inside and out, but how does it compare to the surrounding area? Explore the neighborhood, keeping an eye open for signs of neglect (overgrown lawns, houses in need of paint, trash and junked appliances littering streetscapes). No matter how diligent you are in the upkeep of your property, a run-down neighbourhood can drive your property value down.
Crime Rate – Check with the local police department to find out if the home you are considering is in a safe neighbourhood. Police may be able to provide statistics regarding break-ins and other crimes.
Schools – If you have children, the proximity and quality of schools is an important consideration. Talking to neighbours with school age children can be helpful. In some areas schools will provide data (such as average test scores) that can aid you in determining a school’s quality.
Transportation – Convenient access to public transportation and/or major highways can mean the difference between a pleasurable and not-so-pleasurable commute to work.
Amenities – Amenities like a grocery store, parks, recreational facilities, post office, dry cleaner and a doctor’s office can make life easier if they are located nearby.
Property Values – By researching the selling prices of homes in over the past decade or so, you may be able to predict future trends. Your real estate agent may be able to provide helpful data.
Utilities – Avoid unpleasant surprises by finding out what utility costs are before you decide to purchase. Fees for water, electricity, cable TV, phone and gas vary greatly by region. Don’t forget to find out what is included in your maintenance fees and what isn’t if you are buying a condo – sometimes the maintenance fees plus the regular utility costs can be a small fortune!
Noise and Nuisances – It can be hard to get an accurate impression of a neighbourhood in just one visit. Be sure to return to the neighbourhood at different times of the day and night. Listen for traffic noise, barking dogs, low-flying airplanes and any other noises that could bother you as a resident.
Choosing a neighbourhood is an important part of choosing a new home. You want to make certain you will like your new surroundings as much as your place. Moving into a new home or condo is a wonderful experience, just make sure you are ready for the new area and change of amenities.
It takes some getting used to when you move from the city to the country and vice-versa. Your conveniences change dramatically. Be prepared to accept changes of conversely, find a place that has the conveniences you are accustomed to.
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