Do I Qualify for a Mortgage in Waterloo Region?

Many people wonder if buying a home in Kitchener - Waterloo is really within their reach. It often seems like a daunting purchase for the first-time buyer. The good news is that with the large variety of options available today, it has never been easier to secure a mortgage.

Mortgage lenders assess a variety of criteria when considering mortgage applications. Most lenders look at the following factors when determining whether you qualify for a mortgage loan.

One of the first questions a lender will consider is how much of your total income you’ll be spending on housing. This helps the lender decide whether you can comfortably afford a house.  Mortgage payments for principal, interest, and taxes generally should not exceed 30% of your gross monthly income.

A lender will then look at your debts, which generally include house payments as well as payments on all loans, charge cards, child support, etc., that you make each month.

A history of steady employment, usually within the same job for several years, helps you to qualify. However, a short history in your current job shouldn’t prevent you from getting a loan, as long as there have been no gaps in income over the last two years.

Good credit is also very important in qualifying for a loan, and the lender will want to know that the house is worth the price you plan to pay.

Down payments are not always required, as there are mortgage programs that provide 100% financing for qualified purchasers.  If you have a down payment of 20% or more of the purchase price, this is known as a "conventional" mortgage, and the mortgage lender will not require default insurance.  However, with mortgage loan insurance to cover potential default on payments, you may be able to qualify for a mortgage with a down payment of as little as 5%.

When budgeting, also consider other monthly-related expenses such as condominium fees, heat, hydro, water, property tax, insurance, and household maintenance.

Even if you can’t buy a home right now, home ownership is possible. If you make it a serious goal and plan for it, within two years you can probably overcome most or all of the obstacles that usually face first-time buyers.

Condo Living - the advantages of downsizing in Kitchener-Waterloo

Homeowners in Waterloo Region are realizing that “living large” doesn’t always mean bigger is better. In fact there are many benefits to downsizing to a smaller home. Whether the decision is voluntarily or you are forced to move because of a job relocation or other life event, rest assured there are many benefits to decreasing your home size.

Here are a few benefits of living a “cozy life”.

1. A clutter-free lifestyle
Let’s face it, the more space you have, the more space you will fill with furniture, novelties, and clutter. Downsizing is a great opportunity to review your lifestyle and prioritize your needs. Then, you can choose to bring only what is essential and most valuable to you into your new home.

2. Smaller living means less stress
Many homeowners agree that living in a larger home can lead to greater stress and upkeep. Taking into account cleaning, home repair, furnishing, taxes, gardening, and the cost to run all of these can lead to financial and emotional stress. Downsizing can reduce the burden of daily chores and free up more time and money for leisure activities and your friends and family.

3. Saving energy is the future
One of the main disadvantages of owning a large home is the ever-increasing energy costs. Smaller homes, especially those with energy-efficient appliances and windows, give you the added benefit of reducing your carbon footprint while being budget-friendly.

4. Easier home upkeep
Who needs house help when you’ve only got 40 sqm to clean? Anyone who has lived in bigger houses like traditional bungalows knows that maintaining a fairly big home is not easy. You need more time, energy, effort, and patience. In a smaller home, you can live on a little less. Plus, you also get to save the environment by using fewer cleaning products.

5. Minimalist living
Knowing that you have limited space for non-essentials, you will think harder before making that next purchase. As a result, you save money on furniture, appliances, and decorations that you don’t actually need. Aside from this, you are also less likely to turn your lovely home into a warehouse.

6. More time for fun and travel
You will be surprised at the amount of time you will save by living in a condo. The time you save on maintenance, chores, and decorating can be converted to leisure and relaxation. The same goes with the time you save on traffic. Most condos are in the heart of the metropolis and business districts so driving and commuting to and from work is much faster.

7. Stronger family bond
Among the many benefits of moving to a condo, especially for families, are the many opportunities to bond and have fun. Picnics in the park, swimming weekends, strolling down the gardens, and walking the dog along safe community patios are priceless advantages of living in a condo. At home, you are also more likely to talk to each other and watch movies together because the small space is inevitably bringing you closer.

Living within your means and living simply are at the heart of condo living. Many people think space will be an issue, but it is an opportunity to change the way we live and ultimately make our lives better by living in a small space.

Planting for Late Summer and Early Fall in Waterloo Region

 

Planting isn't just a spring activity in Waterloo Region; fall is also a great time to plant. Turfgrass, spring-blooming bulbs, cool-season vegetables, perennials, trees, and shrubs can all be effectively planted in the fall. Autumn's cooler air temperatures are easier on both plants and gardeners. The soil is still warm, allowing roots to grow until the ground freezes.

What are good vegetables to plant in late summer?
Fall and winter gardening is only successful if you know the average date of the first killing frost in the region in which you live. Crops need to be planted early enough to let them reach full maturity before the killing frost arrives.

Several vegetables can be planted in late summer for a fall crop. For a fall crop, plant beets, carrots, Swiss chard, kohlrabi, and kale in early to mid-August, plant leaf lettuce and spinach in late August to early September, and plant radishes from mid- to late September. Due to hot, dry soil conditions, seed germination in late summer is often rather poor. To promote seed germination, plant fall vegetables when the soil is moist after a rain, sow the seeds slightly deeper than spring plantings, and lightly water the row after the seeds have been sown.

Lettuce seeds are sensitive to extreme heat. To achieve good lettuce seed germination, check the weather forecast and sow the seeds when a prolonged period of mild weather is predicted.

Extending the growing season
There are many ways to add anywhere from 10 to 15 degrees of warmth to the fall and winter garden by taking advantage of free solar energy from the sun. Many of these season-extenders offer frugal ways to get the most from your garden.

Cold Frames
Planting vegetables in a cold frame is an excellent way to lengthen the growing season. Fall and winter crops flourish in a cold frame and are protected from strong winds and cold night temperatures. Cold frames are very easy to build, and once the vegetables are planted, they require minimal care. An old window sash makes an excellent cold frame. Build a frame that is 18 inches high in the back and 12 inches high in the front and attach the window sash.

Greenhouses
Greenhouses were originally constructed for the wealthy during the Roman Empire. Today, however, there are countless options when it comes to building your own greenhouse or purchasing a do-it-yourself kit. Greenhouses extend the growing season by protecting plants from harsh weather and making great use of solar energy. Many people grow vegetables year-round with the help of a greenhouse and a heater.

Raised Beds
Raised beds are popular amongst gardeners wishing to control soil quality and extend the growing season. Soil in raised beds heats up very quickly, and the bed can be covered with a hoop that protects crops when frost is a threat.

Cool-season vegetables
Many vegetables thrive in cool weather, including broccoli, Brussels sprouts, carrots, cabbage, kale, kohlrabi, lettuce, radishes, rutabaga, spinach, and Swiss chard.

Lettuce, spinach, and other greens with a short maturity cycle can be planted later in the summer season. Extend the growing season by planting these vegetables under floating row covers or cold frames that will shield plants from frost but still allow light, air, and water to penetrate.

Trees and shrubs
Fall is an ideal time to plant trees and shrubs. The weather is cool, but the soil is still warm enough for root development. Before digging, always check with your local utility companies to locate any underground lines. Always plant trees and shrubs at their natural soil lines. Keep newly planted trees or shrubs well watered until the ground freezes so they get a good start before going into full dormancy during winter.

Spring bulbs and pansies
Fall is the best time to plant spring bulbs and pansies because the still-warm soil temperatures give their roots time to establish. By planting in fall, you'll get two seasons of enjoyment out of these cool-season favorites. Remove spent flowers so the plant doesn't use its energy to set seeds, and keep the soil moist. After the soil freezes, mulch plants to prevent alternate freezing and thawing cycles that can heave plants out of the ground.

Turfgrass
Fall is the right time to establish new turfgrass and do most lawn maintenance. If you live in the north, cool-season grasses such as bluegrass, fescue, and ryegrass should be fertilized in early September and again in late October or early November to give a boost for earlier spring green-up. In the south, avoid fertilizing dormant warm-season grasses unless they have been over-seeded with winter ryegrass.

Common Home Buying Mistakes in Kitchener, Waterloo and Cambridge

For most people, a home is the largest purchase they’ll ever make, so choosing the wrong property in Waterloo Region can have disastrous implications for your wallet and well-being. Buying a home is not an impulse buy. In most cases, you will have a few months’ notice before you actually go through with the sale. Planning ahead is critical, particularly if you don't have extensive financial resources. Whether you’re a seasoned or first-time buyer, here are a few home buying mistakes to avoid.

1. Altering your financial picture prior to closing

Do not make any major purchases or move money around until you're settled in your new home. When you make a major purchase, you limit the amount of money available for your down payment and decrease the amount of liquid capital in your name. Also, moving your money around could make it more difficult for the lender to properly document and measure your finances. So leave your money where it is until after closing.

2. Getting too attached to one property
In competitive markets, you may have to put in offers on several properties before one is accepted. Some buyers get so infatuated with one property that a rejected offer hits them hard. It’s okay to feel anxious, but you need to be able to fall in and out of love during a home search. If you find a home that you think is perfect for you and you don’t get it, you can’t stay down too long. You have to recognize that wasn’t the house for you.

3. Skipping the home inspection
Home inspections are not required when buying a house, and some sellers can rush the process and discourage an inspection. But buying a house without an inspection is extraordinarily risky because serious problems can exist with the electrical wiring, the plumbing, the roof, or the foundation. An inspector can identify problems before the closing, and you can then ask the seller to fix these problems. If you buy a house and skip the home inspection, you’re financially responsible for any problems that arise after closing.

4. Buying the wrong house
As a home buyer, the very first thing you should do is make a list of priorities and define home purchasing objectives. Figure out what features and benefits are most important and which you can live without. Before you sign on the dotted line, review this list and make sure the house you are about to purchase meets your requirements. It's easy to overlook a major factor that could come back to haunt you later.

5. Maxing out your spending power
Qualifying for a half-million-dollar mortgage does not mean you should buy a mansion; it is therefore wise to be a little more conservative. Homeowners have additional expenses such as property taxes, condo fees, and maintenance that renters do not. However, some first-time buyers fail to budget for these extra costs and assume they can afford a monthly mortgage equivalent to the rent they paid.

One buyer purchased a home that cost him about $100,000 more than he was comfortable spending. But he fell in love with the Victorian character: the high ceilings, sparkling chandeliers, and wide-open space layout. A year later, he could no longer afford to make his mortgage payments. The house was too expensive for him to maintain. He would have been better off buying a smaller home in a more modest neighborhood. But he let his soaring emotions cloud his good judgment.  Make sure you do not go beyond the budget you assigned for the home purchase.

Six Ways to Go Green in Your Garden

People have been practicing organic gardening for years, but now it's being rediscovered by a new generation of gardeners. By simply changing the way you garden, you will not only save money, but also help save the planet.

Here are a few things you can do this summer to maintain your eco-conscious garden:

Build your soil with organic matter
Your garden plants require a continuous source of nutrition. It's impossible to build up organic matter permanently in the soil because it continually decomposes and disappears, so soil building is an ongoing process.

Decaying plant wastes, such as grass clippings, leaves, and kitchen food scraps, are the building blocks of a good compost. It makes sense to set aside a small corner of your garden to serve as a compost heap. A compost bin acts as a backyard fertilizer factory by turning kitchen scraps into eco-friendly food for your garden soil. You save on expensive fertilizers, and you help the environment by keeping your garden and kitchen waste where it should be – in your soil.

Combat weeds with earth-friendly solutions
Keep weeds at bay and help the environment by laying landscape fabric, which works as a durable barrier without the use of chemicals. It also lets air, water, and nutrients into the soil and retains moisture, so you can water less often.

Mulch is another solution to help discourage weeds. A thick layer of mulch will keep light out, preventing weed seeds from germinating, and will also protect the soil, leaving weed seeds to land on the mulch rather than penetrate the soil.

Control pests with plants and wildlife
Regularly rotating the location of your vegetables can help prevent disease and pests from lingering in the soil, waiting to attack next season's crops. Space plants evenly to promote circulation and mix some pest-repelling flowers, such as marigolds, among your vegetables. This will make it harder for pests to find their plant of choice, and naturally deter them with their scent and colour.

Invite wildlife into your backyard to keep pests away. A birdbath will attract birds that will feast on insects, keeping them from attacking your plants, while a pond can lure toads and lizards into your yard, where they too will feed on pests. Eco-friendly pest controls are another option, but if you have a vegetable garden, make sure these products are safe to use on edibles.

Grow your own veggies
Growing your own vegetables is both fun and rewarding. All you really need to get started is some decent soil and a few plants. You should be able to grow enough veggies for a family of four on about 2m² or 3m². Vegetables are marginally more complicated than herbs in that you might actually have to harvest the vegetables now and again, but the thrill and satisfaction of eating produce that you grew yourself is immeasurable. Start easy, with a lemon tree, some cherry tomatoes and maybe a few runner beans, and you’ll be a vegetable gardener in no time.

Only water when your plants really need it
There really is no reason to set timers to water your plants regularly, rain or shine.  Water your plants only when needed. Water early in the day so you can avoid evaporation and winds. The best place to water plants is directly on thirsty roots. Spot watering the soil around your plants with a watering can or hose can also help conserve water.

Life Insurance or Mortgage Insurance? Which One is Better For You?

When buying a home or renewing a mortgage, many people think they are obligated to sign up for their financial institution's mortgage life insurance. Don't rush into buying your bank's insurance policy until you've looked at all the possibilities. You could end up saving money and getting added life insurance coverage at the same time by purchasing a term life insurance policy instead.

What is mortgage life insurance?
Mortgage life insurance, also known as mortgage insurance or creditor insurance, is offered by most banks and lending institutions. It is a life insurance policy that pays the balance of your mortgage to the lending institution if a person listed on the mortgage passes away.

How does term life insurance cover your mortgage?
When you purchase a term life insurance policy, you take into account all the money your family will need in case you are not around to help out. This includes your mortgage payments.

Mortgage life insurance vs. term life insurance
Life insurance gives you more options and greater control over your mortgage protection. Compare these advantages to what happens when your mortgage lender insures your mortgage:

Mortgage insurance	Life insurance
Your insurance covers only your mortgage balance.	You can choose from different types of insurance (i.e., term or permanent) with a death benefit to cover more than just your mortgage.
Even though your mortgage debt reduces over time, your premiums remain level.	Your coverage amount does not decrease over time unless you choose to change it.
If you die, only the outstanding balance on your mortgage is paid off.	If you die, the death benefit is paid to your beneficiary who can use it as they see fit, not just to pay off your mortgage.
The mortgage lender is automatically the beneficiary.	You name the beneficiary.
If you take your mortgage to another company, you may lose your existing mortgage insurance and may be required to re-qualify for new mortgage insurance.	If you take your mortgage to another company, you keep your existing insurance, so you don't have to re-qualify.
You lose all your coverage when your mortgage is repaid, assumed or in default.	As long as premiums are paid, your coverage remains in place, even if your mortgage is repaid, assumed or in default.
You have no flexibility to change your coverage as your needs change.	If you decide you need coverage only until your mortgage is repaid but later realize you require coverage for other needs, you can convert your insurance to a permanent plan.

Extra coverage with term life insurance
A term life insurance policy gives you added coverage and flexibility over a mortgage life insurance policy;

• One major disadvantage of insurance purchased through the bank is the ownership of the policy. The bank owns “your” policy and has complete control over it. The bank also happens to be the beneficiary of your life insurance policy. That means you have no say in who gets the death benefit or what the death benefit is used for. When you die, the bank is going to use the proceeds to pay off the mortgage.

  However, with term life insurance, your family receives any payout from your term life policy directly. It may be more advantageous for your surviving spouse or children to use the proceeds to invest and simply continue to pay the monthly mortgage payments. This would be most appropriate if the current mortgage interest rate is much lower than current investment rates of return available. They could simply invest the proceeds and use the investment income to pay part or all of the mortgage payments on a monthly basis.

• Mortgage insurance policies only cover you for the amount of your mortgage you owe to the bank. As you pay down your mortgage, your coverage amount decreases with it. This is called a reducing balance. With a term life insurance policy, you have a constant level of coverage for the whole term and are getting better value for your monthly payments.

• With mortgage life insurance, you have to reapply any time you switch lending institutions. But with term life insurance, unless you want to increase your coverage or terminate your plan, your policy is automatically renewed up to age 80 with no medical questions asked.

Shop, compare and save
Depending on your age and health, the premiums on mortgage life insurance can be much higher than what you would pay for a term life insurance policy. Take the time to shop around for life insurance. Compare the cost of a term life insurance policy to a mortgage insurance policy. Chances are you'll find a term life insurance policy will have lower yearly premiums and offer more coverage and flexibility than a mortgage insurance policy.

While getting mortgage insurance through your lender is convenient, a term life insurance policy might be the way to go if you're looking to save money.

How to Deal With Home Inspection Issues

Home inspection is a critical component of the home buying process. It is also one of the most common conditions made with buying offers. It is not unusual for a home inspection to identify one or more issues in the inspector's report. The inspector might find a leak in the roof or a broken window that needs replacing.

How do you deal with these issues? Should you pass on a property that you otherwise like?

First of all, you should be clear on the realities of selling or buying a home. No home is perfect, and an honest inspector is very likely to find issues. This is normal.

Just because the home inspector discovered a deficiency doesn’t necessarily mean you shouldn’t purchase the home. Many issues that arise after a home inspection are not deal breakers. However, you should bring the issue up with the seller.  Your REALTOR® will do that on your behalf and look after your interests.

In many circumstances, your agent will be able to negotiate an agreement that is satisfactory to everyone involved. This will usually be in the form of a reduction in the sale price to cover some or all of the costs of the repair, or a requirement to have the seller get the repairs done before you move in.

Otherwise, if major problems are discovered that should be fixed, then this is a different story and may be the reason why you decide not to purchase a home.

So, what are the deal breakers of a home inspection? That depends entirely on you. What is and is not a deal breaker depends on each person's preferences and needs. For example, an inspection that identifies damaged floor joists might be a deciding factor for one person who feels the problem is too expensive or time-consuming to fix.

However, the same trouble with joists might be absolutely acceptable for another client who has resources to fix the issue. A home inspector does not tell a customer whether or not to buy a house. Rather, it's his or her job to provide all the available information so that home buyers (or sellers) can make the right decision for them.

How you handle the negotiations that follow can make a big difference in how much you give on your end and the level of stress you experience from the process. You may decide that the repairs are beyond your tolerance for renovations, and you may choose to walk away from the transaction.

While finding unexpected issues with your otherwise “dream home” may be upsetting, the home inspection information will go a long way in helping you make an informed buying decision. Chances are you can still get the home and have any issues dealt with to your satisfaction.