Closed Mortgages can Help you Pay Off your Mortgage Faster!

For most Canadian homeowners, one of the best ways to achieve financial freedom is to pay off your mortgage. Yet, there’s one simple and easy strategy that can help you pay off your mortgage in a shorter time frame that many people don’t take advantage of. You can benefit from a lower mortgage rate simply by choosing a closed versus open mortgage.

Every homeowner wants to get the lowest rate mortgage possible, yet many homeowners shy away from closed mortgages and pay a higher rate for the flexibility offered by an open mortgage. The reality is that this strategy often ends up costing you more money than you save. Unless you’re in an unusual situation where you’re expecting a large influx of cash – for example, an inheritance or a legal settlement – and you plan to use it to pay off your mortgage before the term of your current loan ends, closed mortgages are usually your most cost effective choice. While they don’t offer the flexibility of making additional payments whenever you wish, most closed mortgages still allow you to pay an additional lump sum payment annually. There is usually a limit to what you can add in these annual payments, but it is typically a generous amount, such as ten or fifteen percent of the loan each year. This would normally be more than enough to handle any additional payment the average homeowner might have available. In addition, you can pay down your mortgage by any amount at the end of the loan’s term. Talk to your lender to find out what provisions their closed mortgages offer for repayment. In most cases, you’ll find the lower rate closed mortgage is your best option.

What if you already have a mortgage in place? Well, if your current mortgage loan is charging a higher rate than some of the very attractive interest rates now available, then you should look into the options for refinancing your loan. If your mortgage hasn’t completed its term, you may still find that your lender will let you renegotiate a new mortgage now, particularly if the term for the new mortgage is a long one. It’s a good way for your mortgage lender to lock in your business for a longer period of time, rather than risk losing it when renewal time comes around. Even if there’s a penalty to get out of an existing mortgage, the penalty usually reduces as you approach your renewal date. You may find that there is a relatively low cost to renew early, versus waiting until the current term concludes.

If you’re thinking of renegotiating your loan, you should bear in mind that we’ve already seen interest and mortgage rates starting to rise recently. If you decide to wait until the term of your current mortgage loan expires before renegotiating, you could risk a higher rate at renewal time, and that means paying more than you have to for many more years to come. For more creative financing strategies, contact The Mash Team at Coldwell Banker R.M.R. Real Estate

Do You Need a Property Survey? 

As a prospective home buyer, you’ve probably got a lot of questions about the buying process, and you may be wondering whether you need an up-to-date property survey.  For buyers, the answer is generally, yes.  However, rather than simply relying on the short answer, you need a clear understanding of when and why you should have one done.

Property surveys are usually done for the benefit of the buyer. A property survey usually resembles a map, and includes dimensions and written details of the property and every permanent structure on it. The original survey is carried out with the construction of a house.  Over time, improvements may be made to the property, such as fences, a deck, a pool, garden shed, and so on.  Additions to the house itself, such as a porch, or even an extension may also have been built after the original construction.

In addition to structures, certain easements – that is, the right to access the property – may have been added to allow power, water or telephone companies access for service purposes.  If such changes have occurred since the last survey was done and do not appear on the most recent document,  then the survey is out of date and thus will have little value in the real estate transaction

If the survey shows certain deficiencies, such as a fence that’s located outside the property line, you as the buyer can then ask the seller to correct the problem before completing the purchase.  Your Coldwell Banker real estate professional can prepare an offer to purchase that is conditional upon receiving an up-to-date survey that’s acceptable to you.  Also, be aware that some lending institutions require the buyer to provide a current survey of the property being purchased before they will grant final approval of a mortgage loan.  You can ask your lender about this when you arrange to be pre-qualified for a mortgage.

When a seller has a current survey for their listing, it’s a great plus, since this can help to ensure the correct information is properly disclosed, which in turn helps your transaction to move smoothly to completion.  It should be noted that not every transaction requires that a new survey be completed at the time of sale.  It depends on when the last survey was completed and whether any improvements or changes have taken place since then.  A survey that was completed a few years ago may be completely valid if there have been no further changes.

If a survey is needed, and no up-to-date version is available, you may be wondering who pays the cost to have a new survey done.  The time to raise this question is during the negotiations with the seller.  The seller is under no obligation to provide any such documentation, or to participate in the cost of a new one, unless it’s spelled out in the offer. Ask your Coldwell Banker salesperson for their expert advice on this and any other real estate matter.

 

 

 

Be prepared for any emergency

There’s hardly any area in Canada that hasn’t been hit by a disaster of some sort in recent years – from flooding or wildfires in BC, power outages and damaging winds in Ontario and record snowfalls in the Maritimes. The federal government recommends that every Canadian household prepare an emergency kit that will help your family be self-sufficient without power or tap water for 72 hours.

Make sure your kit is easy to carry. Keep it in a backpack, duffel bag or suitcase with wheels, in an easy-to-reach, accessible place, such as your front hall closet. Make sure everyone in the household knows where to find it. Here are the contents of the recommended basic emergency kit:

Water — at least two litres of water per person per day. (Include small bottles that can be carried easily in case of an evacuation order.)

Food that won’t spoil, such as canned food, energy bars and dried foods (replace it once a year)

Manual can-opener (cups and a few utensils will be helpful if you have to leave the premises)

Flashlight and batteries

Candles in sturdy containers and matches or lighter (remember to extinguish before retiring)

Battery-powered or wind-up radio (and extra batteries)

First aid kit

Special items such as prescription medications, infant formula and equipment for people with disabilities

Extra keys for your car and house

Some cash in smaller bills, such as $10 bills and change for payphones (remember automated tellers or debit machines may not be working)

Finally, leave a copy of your home’s emergency plan , including contact information for all family members and next of kin; friends or relatives where you can stay if you need to relocate temporarily; a meeting place where separated family members can reunite; and all exits from your home and your neighborhood.

Don’t refuse that low offer – Keep negotiating!   

Receiving an offer to purchase is one of the most emotionally charged events in the entire selling process.  Sellers should try to bear this in mind, and make a conscious effort to stand back and take an objective view of the situation.  Most Coldwell Banker® real estate professionals have seen sellers who let their personal attachment to their home cloud their judgment. Their emotional reaction makes them lose sight of the importance of working with an offer, even if its a low one.  Sometimes when an offer comes in that is quite low, homeowners take it as a personal insult.  They react so strongly that they just refuse the offer out of hand.  If you let this happen to you, then you could be missing out.

Even if it looks like you and the potential buyer are very far apart, the important thing to keep in mind is that a serious buyer has made an offer that has opened negotiations. Your goal is to keep them open until you get the results you want.

When considering an offer, bear in mind that prospective buyers usually don’t expect their first offer to be accepted outright.  Don’t let your emotions drive your decision.  Look at it as a purely business proposition.  There are several positive aspects to receiving an offer, even if it’s not what you hoped for.  First of all, you’ve made contact with a serious buyer who’s ready to purchase.  Secondly, you know the buyer prefers your property over any other in your price range.  Don’t slam the door on this prospect.  You can keep negotiations going with a counter-offer (or “sign back”).  A sign-back doesn’t mean you have to make major concessions to your desired price or terms.  Even if you send the offer back with the same terms as your listing, it gives your sales representative one more opportunity to meet with these interested buyers to promote your property, and counter objections.  They can also offer creative financing options that might encourage a better offer.

When coming up with a counter offer, its important to keep in mind that other aspects of an offer have value besides price.  Even if you can’t move very far from your list price, you may be able to offer other concessions such as including fixtures (lighting, appliances, draperies) or changing your preferred closing date to accommodate the buyer.

Keeping the lines of communication open gives your sales representative a chance to do their job.  Want to know more about effective negotiating strategies?  Ask The Mash Team.  You’ll be glad you called us first!

Buy or Rent – What’s right for you?

A key reason many people choose to rent instead of buying their own home is their reluctance to sign their name to a long-term mortgage agreement. But when you come right down to it, very few of us can expect to go through life without paying the cost of a place of residence in one form or another. As a renter, you’ve probably already made a commitment to a fixed schedule of payments for housing – but instead of a mortgage, it’s a lease or rental agreement. In reality, rather than being a negative, one of the major advantages of a mortgage agreement is that payments can be locked in for an extended period—which can work in your favour. Since no one can guarantee what your rental payments may be three or even five years down the road, your mortgage agreement can actually protect you from the unexpected increases you may experience when you rent.

Still, some people are intimidated by the large amount of debt that is represented by a mortgage agreement. Yet if you added up all the rental payments you could expect to pay over a space of many years, you may find that going the mortgage route is actually the more affordable of the two options. And at the end of the process, renters are left with nothing to show but a pile of receipts. With today’s low mortgage rates and some creative financing, the cost of buying a home may be lower than you think. Your Coldwell Banker real estate professional can show you how owning your own home may be more affordable than you ever imagined.

While making mortgage payments may actually be more affordable than paying rent, let’s not lose sight of the biggest financial benefit of all. The simple fact is, when you rent, you’re building someone else’s ownership equity in the property where you live. On the other hand, when you buy a home, you’re making an investment in your future, while a portion of your mortgage payment builds personal equity for you. If you decide to sell sometime in the future, that equity is something you’ll take with you as you make your next move.

Lastly, let’s not forget the creative freedom and pride of ownership that comes with owning your own property. When you buy, you decide about the home improvements and decor changes you want to make. You decide colour schemes and where to hang that favourite picture. And you’ll also earn the added equity that any such improvements may add to your home. Spending money to improve a rental property just puts value in someone else’s pocket.

If you’re tired of paying off someone else’s mortgage for them, then why not call The Mash Teaml for a no obligation consultation to help you find out how to make your dream of home ownership a reality.

 

Buyer Beware – of the Low Down Payment! 

If you’re looking to get into the housing market, a listing that’s advertised as requiring little or no money down can sound like a great deal. But is it really?Before you decide, you should consider who this type of advertising appeals to and why this pricing tactic is being used. You may just find that what sounded like a great deal can actually end up costing you a lot more money than you needed to spend.Low or zero-money down payment listings will most appeal to those buyers who don’t have a lot of financial resources to work with. Such buyers will typically have difficulty qualifying for a mortgage loan from a traditional lender. So why would a listing want to attract this kind of buyer? There are many different reasons. It may just be that the homeowner is anxious to sell quickly, particularly if they’ve already bought another property. Or it may be that there’s a lot of competition for sale in that particular area, or even on the same street and the sellers want to offer something extra to help their home stand out from the rest.However, there are other reasons that will not benefit the buyer. One such reason is that the home’s price has been somewhat inflated, but the seller is hoping that the ‘zero money down’ tactic will attract those buyers that have few other options to choose from. They want to focus buyers on the aspect of how affordable it is to get into the property, rather than on the final cost. Whether or not the listing may be overpriced, a low down payment offer is often tied to the buyer taking out private financing – sometimes with the seller or someone connected to the seller – at a very high interest rate. In cases like this, what first sounded like a ‘bargain’ can, over time, cost you much more money than you’d pay for another comparable property with traditional financing.The bottom line here is that you should exercise caution where properties advertise a low down payment. Here’s where your Coldwell Banker real estate professional can help, by providing you with a Comparative Market Analysis (CMA) of other homes in the area. This will help you determine if a home has been properly priced within today’s market. Your Coldwell Banker professional can also advise you on current mortgage rates and creative financing options. There’s no reason why you shouldn’t consider a low down payment listing – just go into it with both eyes open! With some expert advice from your Coldwell Banker professional, you can make an informed decision that’s right for you.

How to pay off your mortgage quickly 

Many financial planners will tell you that one of the best investment strategies you can adopt is to pay off your mortgage in the shortest time frame possible.  Here are a few tips to put your mortgage repayment schedule on the fast track, and with a minimum of hassle and stress.

  • Select the most frequent payment option available.  By choosing to make your mortgage payment on a bi-weekly, or better still, a weekly basis versus monthly payments, the result is making extra payments every year.  Over the life of your mortgage loan, this approach can save you thousands of dollars in interest, and pay off your mortgage years earlier.  Best of all, you’ll hardly notice the difference, since you’ll simply be making regular payments.
  • Consider a closed mortgage.  Getting the lowest rate mortgage available just seems like common sense, yet a great many homeowners choose open mortgages versus the lower rate closed versions.  Unless you’re expecting a windfall and are planning to pay off your mortgage before the end of it’s term, closed mortgages may be your best choice.  Although you can’t add extra money whenever you wish, most closed mortgages allow for an annual lump sum payment, perhaps ten percent of the loan.  Talk to your lender to find out what provisions their closed mortgages offer for repayment.  In most cases, you’ll find that the lower rate closed mortgage offers you the best alternative.
  • Shop around for mortgages.  Gone are the days of “one-stop financial shopping” when people routinely arranged for mortgages at the same place where they did their banking.  Your mortgage represents one of the biggest financial commitments of your life, so it pays to do some research and a little comparison shopping.  There may also be some financing options available to you that you haven’t even considered.  Ask your Coldwell Banker real estate professional to tell you more.
  • Lock in rates while they’re at their most affordable.  A good way to protect yourself against a potential increase in interest rates is to get pre-qualified for a mortgage, and lock in your interest rate now with your lender.  A difference of even a quarter percent in interest can add up to thousands of dollars over the life of a mortgage.  Rates are very favorable right now, so why not protect yourself and lock in the current rates while you look for a home, and avoid the risk of paying a higher mortgage payment if rates go up before you close. 

 

 

Going green’ is a growing trend in real estate

Until recently, the term “greenhouse” meant a building made of glass, where plants aregreenhouse picture cultivated.   But for today’s prospective homebuyer, the terms “green” and “house” can conjure up very different meanings—that of a home that uses sustainable building materials and energy efficient design.  And now, according to the Canadian Real Estate Association (CREA), the growing green housing movement is significantly changing how property is marketed and managed.

In a global shift towards ‘eco-friendly’ housing, people are now recognizing that a green building is efficient, and this efficiency has real economic, as well as social and environmental value. No longer is ‘green’ housing just a trendy buzzword.  It is quickly becoming a measurable standard throughout the world.  For building construction, organizations in the UK, the US and Australia have agreed to cooperate and develop common metrics for measuring CO2 emissions. These leading green building ratings are now available internationally for measuring the environmental sustainability of new and existing homes and buildings.

As you might expect with a newly-emerging field, right now there is little consistency or standardization amongst the various degrees of ‘greenness” within a market.  There is already a growing demand for some type of consistency which will make it easier for property developers and building owners to monitor and compare the energy performance of their buildings.  But when it comes to individual homeowners—that is not so easy.

Consumers looking to purchase eco-friendly homes have limited options to obtain detailed information on the green aspects of a home, often relying on the information provided by the current homeowner which may or may not be accurate.  So, while going green is good for consumers and for our planet, this is another area where homebuyers can benefit from the advice of real estate industry professionals.  Whether it’s a professional home inspector or your local Coldwell Banker sales representative, they can point out aspects of a home that will help save you money on your energy costs.  And if you plan on selling, talk to your Coldwell Banker professional about how to showcase the ‘green’ features in your home to appeal to today’s eco-conscious consumer.

 

Closing Costs and Moving Expenses

How Much Home Can You Afford?

After you’ve estimated your mortgage payment and other ongoing costs for carrying your first home, you’ll also need to consider the one-time expenses associated with the purchase of a property.  This includes your closing costs, as well as your moving 9lyusbzc4su1_manwithboxesD4-thumbnailexpenses.

Be aware that there is no set rule for what’s included in closing costs, or how they’re calculated.  Closing costs can vary significantly from property to property, but may include home inspection fees, appraisal fees, title search, survey costs, home insurance and lawyer’s fees.  Some of these costs may be shared with the seller, while others are payable by the buyer only.  Your Coldwell Banker salesperson can give you helpful advice about specifying a cost-sharing agreement for some of these related costs within your offer to purchase. You will also be required to reimburse the seller for a proportionate share of specific housing expenses that have been pre-paid by the seller and continue after your closing date.  These pre-paid expenses usually include property taxes and utilities, and the amount is typically equivalent to only a few months service.  Your real estate lawyer will give you an exact accounting of these expenses upon closing, so be sure to discuss this with your lawyer in advance, so you will have sufficient funds available to cover these costs at that time.  After these one-time adjustments are made, and the transfer of ownership is completed, you will pay for such expenses directly in future. In addition, you’ll also have to budget for your relocation costs.  This could include such costs as a moving company truck and labor, packing charges, boxes and wrapping materials, or rental of a vehicle or trailer if you’re doing all or part of the move on your own.  There can be a wide variation of costs for these types of services, so you should start planning well in advance, and obtain comparative quotes from more than one mover.  Get the quotes in writing and ensure that all the required equipment, staffing and materials are documented.  Ask the provider to specify what charges may apply if your move does not proceed on schedule.  Be sure to read all the fine print carefully, so you understand upfront what other charges, such as waiting time, or a late return charge you might incur that are not planned for in the initial quote. Your Coldwell Banker salesperson can be a valuable resource here too.  Not only can they help you estimate carrying and closing costs, they can also recommend experienced and trusted service providers to help you keep the cost of moving and home ownership affordable and keep your move hassle free.

How to choose a real estate professional

Whether you’re buying or selling a home, it can sometimes be a difficult task. You can make it that much easier by choosing the right realtor. Successful real estate professionals know that today’s informed and techno-savvy customers need service that goes far beyond the transaction itself. In order to succeed in today’s market, the best real estate professionals are emerging as facilitators of a comprehensive service process that encompasses the entire homeownership experience – before, during and after the sale.

When choosing a realtor, you can start your selection process by examining their track record. What companies and what salespeople have already proven their success in your marketplace? Ask lots of questions of anyone soliciting your business. Do they have experience working with your type of property and in your price range? What other business background or special skills do they have that puts them in a better position to understand and respond to the needs of today’s consumer? Are they well connected to the community and how do they keep abreast of local events that may impact property values? What other home related services can they assist you with? Can they help with creative financing options? Can they recommend trusted and reliable service providers for your home inspection, legal or moving services?

One thing you can rely on is that today’s real estate salesperson is a true professional. Industry standards and licensing requirements demand that every real estate professional completes a rigorous course of instruction and examinations before they are entrusted with your business. Ongoing education from company or industry programs further enhances their skills. When choosing a real estate representative, ask them about their training, experience and performance history. That information, combined with how clearly and how convincingly the representative builds their own case, will help you to make the right choice. After all, if a representative does a good job of convincing you, they’ll probably be just as convincing when they represent your best interests.

But while a good salesperson will offer good service, the best salesperson offers service that changes with the times. They use cutting edge technology to respond more quickly and more knowledgeably to their customers’ needs than would have been thought possible just a few years ago. They market their customers’ properties not only by posting a listing on a company website, but also through innovative vehicles as Personal Retriever?, an online property search engine from Coldwell Banker that matches thousands of listings against your dream home wish list. Other digital marketing tactics such as personal websites and e-newsletters are all part of an effective agent’s online campaign.

Finally, you’ll want a sales representative who listens to you, who understands your needs, and ideally a representative who will commit to your customer satisfaction.

With You Every Step Of The Way

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