Category Archives: Are You Fit To Buy

What’s a Mortgage Deposit? Only Half of Canadians Know!

While many Canadians have a good understanding of financial services terms, a recent Angus Reid survey revealed that only 51 percent of respondents were confident they knew what a mortgage deposit was, with 48 percent admitting they were “not very confident” or “not at all confident” they understood the term. #cbrmr

It’s easy to see why there’s some confusion over the definition, as homebuyers often use the terms “deposit” and “down payment” interchangeably. While they both refer to money put forward in the home buying process, here’s some clarification of each term:

A deposit is comprised of the initial funds the buyer submits during the offer process to secure or commit to a property they wish to purchase, as a gesture of trust and good faith to the seller. It’s typically made at the time the offer is made, or upon acceptance of the offer. There’s no typical amount for the deposit, although in a hot housing market, an offer with a higher deposit could be more attractive to the seller.

If the seller accepts the offer, the deposit will typically be kept in a trust account — usually by the seller’s brokerage — until it becomes payable.

A down payment is the money the buyer pays to the seller to be eligible for financing once the offer is accepted. It’s a lump sum that’s paid out of the buyer’s pocket, not financed through a mortgage. When the time comes to close on the home, the deposit will go toward the down payment and will be credited toward the home’s purchase price.

Are you planning to make a move this summer? Call TheMashTeam at 905 430-6655 for the latest market update!

The Real Estate Market is Still Strong…despite what you hear on the news!

We just wanted to take the time to reach out regarding a lot of negativity in the news lately about the real estate market, interest rates and where things are heading.

Just this morning on the news we heard that April sales were down over 30% from last year and while last year’s market was an anomaly, we think it’s fair to say that the bad press is causing some of this down turn by portraying this as a “bad time to buy or sell”.

Yes, rates have been on the rise over the last year, however, did you know that you can still get interest rates as low as Prime (currently 3.45%) -.95% on a variable term or 3.29% for a 5 year fixed. These are still some great rates compared to what we’ve experienced in the past!

Even if you are not in the market to move, it may be a good time to refinance and consolidate some of those debts that may be eating into your monthly cash flow. Why continue to pay up to 20% interest on credit cards when you could borrow against the equity of your home and pay them off.

Market prices are starting to settle down, unemployment is at a 40 year low and rates are still good. Those are a few things to remain positive about.

If you have any questions or concerns regarding your mortgage or the market in general, please let The Mash Team know and we will be happy to help. #cbrmr

Spring Into Action

Spring is peak home-buying time. If you’re in the market for a new home this season, get a jump on your competition by ticking off these tasks before even beginning the home-hunting process.

  • Obtain a copy of your credit report. It’s always wise to check your credit standing through one of the free credit-reporting services once a year, even if you’re not in the market for a loan, just to be sure the report is up-to-date and accurate. In the event it contains any errors or omissions (e.g., closed charge accounts that appear as available credit or repaid loans that show up as outstanding), you’ll want to get those mistakes cleared up before they slow things down when you do need a loan, or worse, ruin your chances of obtaining a loan altogether.
  • Get pre-approved for a mortgage. And make sure your real estate sales representative knows! By getting pre-approved, not only will your representative be able to target properties that fit your budget, you’ll know that financing won’t be a stumbling block when you do find that perfect home. Also, as a pre-approved buyer, you can offer sellers a quicker closing, which can give you the edge over competing buyers who have yet to secure their own loan approval.
  • Be available. Make sure your real estate sales representative knows the quickest way to contact you as properties meeting your criteria become available. And have a contingency plan ready for viewing properties at a moment’s notice — have a babysitter on speed-dial, for example.
  • Line up your crew. Your property purchase will likely necessitate securing the services of professionals, such as a home inspector and a lawyer. Have your team lined up ahead of time so that you don’t hinder the home-buying process by waiting until the last minute to recruit. Call The Mash Team first to get started. #cbrmr

Planning a Purchase in the New Year?

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It may come as a surprise to hear that when it comes to buying real estate, money sometimes isn’t the bottom line. While price is obviously of crucial importance for sellers, sometimes it’s another term of your offer that can make your bid the winning one.

After price, the closing date tends to be the most frequently negotiated term of an offer. Perhaps the seller requires a quick close due to a job transfer or a scheduled closing date on another home. Maybe the seller is looking for a long closing, allowing them time to find their next property. Whatever the circumstances, your ability to accomodate the seller’s closing date may be just what tips the scales in your favour.

A buyer will often make their offer conditional upon their ability to obtain a specific amount and type of financing, or upon selling their current home by a certain date. If the buyer can’t arrange that financing or sell their home by the specified date, their offer becomes null and void. Such offers are risky for sellers. If you can make an offer free of such conditions, thus eliminating the risk for the seller, it may win you the home —even if your price is lower that that of a competing offer.

For some sellers, it may be your willingness to waive another common offer contingency —the home inspection— that clinches the deal. Foregoing an inspection and agreeing to buy the property “for better of for worse” is risky, but if you’re willing to assume that risk, it might be just what seals the deal.

Not sure how to approach the market? Your real estate representative is your best source for guidance, especially when it comes to local buying and selling trends.

Want to Know How to Get into the Real Estate Market?

How much would you need to come up with for a down payment these days?

In Canada, the minimum down payment  depends on the purchase price of the property your thinking about buying. You would need  a down payment of 5 percent of a home’s purchase price for a property worth $500,000 or less. When the purchase price is above $500,000 but under $1 million, the minimum down payment is 5 percent for the first $500,000 and 10 percent for the remaining balance and if the property is priced at over $1 million, you require a minimum 20 percent down payment, and the lender’s lending policies.

In addition to the down payment, you need to factor in the closing costs which include legal costs, taxes and land transfer fees — costs that can add another 1.5 percent to 4 percent of the purchase price to your up-front costs.

Right now its a great time to get into the market. Prices are stable, there are more homes to choose from and less buyers competing for the same home.

Wondering how much of a mortgage you can afford? Please call The Mash Team today for a no-obligation consultation! We will help you move!

7 Reasons Buying Beats Renting

Right now in the Durham Region, home buying is much better than renting. Discover the advantages home buyers have in today’s market that renters are missing out on.

Why Buying a Home Thru The Mash Team is Better than Renting
Conventional wisdom used to state that buying a home is always a great investment.

Now more than ever it has become easier for “First Time Buyers” as Prices Have Dropped since April. There are more homes to choose from and we are not experiencing as many Multiple Offers situations.  We seem to be in a more typical summer balanced market.

The good news is that Year to date stats show that the average selling price is higher today than from  a year ago.

Price Security in Home Buying
Historically, prices tend to rise over time. For example, a loaf of bread, a gallon of milk, and a semester of college tuition cost more today than they did in 1990.

Your mortgage payment, however, is one constant you can rely upon. If you hold a fixed-rate mortgage, your monthly principle and interest (P&I) payment remains the same, regardless of how prices are moving in other industries. (Your property taxes and homeowners insurance may rise.)

Price consistency offers the advantage of planning for the long-term future. As a homeowner, you can anticipate your monthly housing costs for 1, 3, or 5 years.

As a renter, you can’t lock in this type of security. As prices climb, landlords raise the rent to meet the current market.  The allowable rental increase for 2018 is 1.8%.

If you’re renting with a month-to-month lease in Ontario, your landlord can increase your rent with 90 days of written notice. This puts renters in the difficult position of needing to either find the additional funds or scramble to secure new housing with little advance warning.

Investment – Cash-on-Cash Return
As a home buyer, the outlay of a small down payment as low as 5% can give you the opportunity to make out sized gains.

Hypothetically, for example, imagine that you put a 20 percent down payment on a $100,000 house. The price rises 5 percent, to $105,000. You would earn $5,000 on your initial outlay of $20,000 – a return of 25 percent. This is known as cash-on-cash return, and homeownership can make this type of gain accessible to the average person.

Forced Savings
A home can be a type of “forced savings.” Each month, a portion of your mortgage payment is returned to you in the form of equity. The longer you own your home, the more equity you build – both via mortgage payments as well as in potential value increases.

Renters don’t have this luxury. Many of the pro-rental arguments hinge on the assumption that money “saved” (either via lower monthly payments or through alternate uses of the down payment) would be invested in the stock market.

Realistically, though, what’s the likelihood that a renter would invest that money, rather than spend it on a trip to the Bahamas? And if that money were invested, what’s the likelihood that a renter wouldn’t panic during the next crash and sell at the bottom of the market, turning paper losses into actual losses?

A home functions as ‘forced savings,’ helping you build equity. Like a personal trainer, it keeps you accountable.

Flexibility with Home Improvements
As a homeowner, you can have the freedom to upgrade your home to your heart’s content – without carrying risk or ongoing financial commitment.

If you get a bonus at work, you can celebrate by installing hardwood floors or renovating the bathroom. If you suffer a financial setback, you can defer your plans to remodel the kitchen.

Renters don’t hold this flexibility. The only way they can upgrade their living space is by moving, and this entails both hassle and commitment.

Homeowners, by contrast, can upgrade their home piecemeal as they accumulate cash over the years. Home improvements are a one-time expense that doesn’t require continuous commitment.

Pride of Home Ownership
You wouldn’t invest hundreds of hours or dollars cultivating an exquisite garden in a rental property. You wouldn’t paint, hang wallpaper or replace the light fixtures on a rental property.

As a homeowner, you can take pride in personalizing and perfecting your home. The space can truly morph into a reflection of you, in a way that a rental property never could.

Neighborhood Connection
As a homeowner, you’re more likely to become involved in your local community. There’s a stronger chance that you’ll join the neighborhood association if one was available, organize potlucks or block parties with your neighbors, coach a local sports league or volunteer at the local school.

While it’s possible that you’ll get involved with the community as a renter, you’ll also likely feel an emotional barrier that stems from knowing you might move in a year or two. Committing to an area for the long-term can inspire you to invest more time and energy into improving the neighborhood and connecting with the surrounding community.

For more information on how to buy a home, call us. We are here to help.  Real Estate is still a good investment.

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Fitting Into Today’s Housing Market

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Today’s ever-rising real estate prices often mean one of two things for buyers — they must either increase their budget, or downsize their housing expectations.

The Canada Mortgage and Housing Corporation (CMHC) reports that the construction of single-detached homes fell between 2012 and 2016. The lower inventory, coupled with increased demand, resulted in a rise in prices for this housing type. In many cases the result is that buyers who initially planned for a single-family house will be settling into condos, while some would-be condo buyers may have to reassess how to fit their lives into even more compact footage.

Looking at condo construction, the CMHC notes that although there might be a slight decline in condo starts this year, there will be a rebound in condo construction next year due to increased demand for more affordable housing.

In the meantime, residents moving into more “cozy” condos need to be creative about how they fit into their smaller spaces. Luckily, furniture manufacturers are responding to the demand for space-efficient solutions and designing options specifically for today’s condos. Furniture that flips up, slides out and folds down can now be cleverly concealed to fit into any space.

Don’t automatically dismiss a condo with great features, a reasonable price and other plusses because you think it’s too small. Today’s options make it easier than ever to complete your condo with clever space solutions that fit all your needs!

Call today to find out about the many condo configurations available in today’s market.

Can You See What Your REALTOR Sees in this Neighbourhood?

REALTORS® have their fingers on the pulse of the market. They know the questions to ask, the areas to probe and what to look for so that you get a complete picture of the property and community you’re considering. They can also identify the complex financial and legal issues involved in a real estate transaction.

Can you see what your REALTOR sees in the rural property?

REALTORS® have their fingers on the pulse of the market. They know the questions to ask, the areas to probe and what to look for so that you get a complete picture of the property. They can also identify the complex financial and legal issues involved in a real estate transaction.

Can You See What Your REALTOR sees in this Condo?

REALTORS® have their fingers on the pulse of the market. They know the questions to ask, the areas to probe and what to look for so that you get a complete picture of the property and community you’re considering. They can also identify the complex financial and legal issues involved in a real estate transaction.