How Much Money Will Your Lender Charge You to Break Your Mortage?

How much will it cost to "break" your mortgage? It's important to know before you sell!

Here is a great video from the Globe and Mail explaining the different types of calculations used to determine the amount of money you are required to pay your lender for breaking your mortgage.

Click this link: http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/drawing-conclusions-the-cost-of-breaking-a-mortgage-can-vary-wildly/article24030002/

Contact me today for a free Home Value Report!

How to clean your eaves troughs...

Cleaning out the eaves troughs is never a fun task but, unfortunately, it is a necessary evil of home maintenance. Failing to flush out your troughs and keep them clear of debris can lead to gutter rusting and roof damage, not to mention the fact that decaying plant matter in your gutters can smell horrible and stain the sides of your home. Taking a short amount of time to clean out your eaves troughs, two or three times a year, will minimize damage to home, not to mention making the job easier to complete.

The purpose of the eaves trough, or gutter, is to direct rainwater off your roof and away from your home. This helps to prevent standing water around your home, and minimizes the amount of damage that your home will suffer from water during the rainy season or even spring thaw. When these troughs become blocked, however, it allows the water to sit there in the troughs and this can eventually lead to rusting eaves troughs and a leaking roof; neither of which is fun to repair. If you stay on top of this job, it will be quick and virtually effortless.

There are several ways of cleaning your eaves troughs. While some companies market special gutter rakes and eaves trowels, the task can be done with a simple garden trowel. In addition to this, you will also want a sturdy and reliable ladder, some rubber gloves and a garden hose, preferably equipped with a spray and stream adjustable nozzle (you will want to turn it to stream). Some people will suggest using a power washer, but this is not advisable - not only is it danger to use a power washer from atop a ladder, but you also risk damaging your home, due to the angle you would have to spray at.

For best results, start at the drain pipe that leads down off the side of your house and to where the water is draining off to. Ensure that nothing is obstructing the end of this pipe and that it’s draining to a good area, where you won’t be walking around. Once you have cleared away anything in the way, spray water down your pipe and continue to do so until the water runs clear out onto the ground. When it has done so, you’re safe to move on.

Working your way back from the drain pipe, use your trowel to scoop and scrape any debris you find out of the eaves troughs. While you’re working on the roof, it’s highly advisable that you have someone with you, helping to support the ladder. Take your time and be sure never to over-stretch. It’s much easier to get down and move the ladder over, than to try and reach an itch in a body cast. Safety should always come first.

Alternate between scooping, scraping and spraying, ensuring that the water flows easily behind your work area and that no small sticks or leaves escape, that could get down inside and block up your eaves trough again. In no time, you will be done with this task and, if you do it every few months, you’ll find it’s a quick snap to spray out the gutters and then put all your supplies away. Like many things in life; an ounce of prevention is worth a pound of cure, when it comes to cleaning out your gutters. If you really want to make your job a snap, check into purchasing gutter toppers or eaves trough screens. Blocking a lot of the debris and keeping it from getting into your gutters in the first place, toppers can be a hassle to install, but make for a lot less work in the long run.

Cleaning the eaves troughs isn’t really that much of a chore and it is necessary to maintain a beautiful and trouble-free home. Regular cleanings will save you time and energy, and you can rest easier, knowing you’ve taken these extra steps to keep your home beautiful, inside and out. So what are you waiting for? It’s time to get to cleaning!

Take the Stress Out of Homebuying

Buying a home should be fun, not stressful.

As you look for your dream home, keep in mind these tips for making the process as peaceful as possible.

  

 

1. Find a real estate agent who you connect with. Home buying is not only a big financial commitment, but also an emotional one. It’s critical that the REALTOR® you chose is both highly skilled and a good fit with your personality.
2. Remember, there’s no “right” time to buy, just as there’s no perfect time to sell. If you find a home now, don’t try to second-guess interest rates or the housing market by waiting longer — you risk losing out on the home of your dreams. The housing market usually doesn’t change fast enough to make that much difference in price, and a good home won’t stay on the market long.
3. Don’t ask for too many opinions. It’s natural to want reassurance for such a big decision, but too many ideas from too many people will make it much harder to make a decision. Focus on the wants and needs of your immediate family — the people who will be living in the home.
4. Accept that no house is ever perfect. If it’s in the right location, the yard may be a bit smaller than you had hoped. The kitchen may be perfect, but the roof needs repair. Make a list of your top priorities and focus in on things that are most important to you. Let the minor ones go.
5. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price or by refusing to budge on your offer may cost you the home you love. Negotiation is give and take.
6. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself — room size, kitchen, etc. — that you forget about important issues as noise level, location to amenities, and other aspects that also have a big impact on your quality of life.
7. Plan ahead. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate home insurance, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.
8. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be costs. Don’t leave yourself short and let your home deteriorate.
9. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big financial commitment. But it also yields big benefits. Don’t lose sight of why you wanted to buy a home and what made you fall in love with the property you purchased.
10. Choose a home first because you love it; then think about appreciation. Homes in K-W traditionally appreciate around 3%, but it varies by neighbouhood.  Long-term resale is a consideration, but it has to be a home you love.

 

Contact me today for a Free Home-Buyer's Toolkit or a Home Value Report!

Mortrgage Insurance - do you know who it's for?

When you buy a home, there are two very distinct types of mortgage insurance that may come into play – one is Mortgage Loan Insurance and the other is Mortgage Life Insurance.  Even the names sound similar, but these two types of coverage have completely different purposes and benefits.  Unfortunately, consumers sometimes confuse the two.  That confusion can result in the homebuyer not really understanding what they’ve bought or making the wrong choice when deciding on coverage.  Either way, you need to know the difference.  

Both types of mortgage insurance will typically be raised by your mortgage lender at the time of financing.  Mortgage Loan Insurance is for what is considered a high risk loan and this is determined by the amount of your down payment.  If you have what is called a high ratio mortgage (less than 20% down payment) and you’re financing through a major Canadian financial institution, you’ll be required by law to take out mortgage loan insurance and you’ll be required to pay the insurance premium.  Mortgage insurance protects the lender if you don’t make your payments. It doesn’t protect you, the buyer, but you must pay the premium.

For most people the hardest part of buying a home, especially the first one, is saving the down payment. Many people won’t have 20% of the purchase price to put down. With mortgage loan insurance, buyers can put as little as 5% down. Then, if the borrower defaults (fails to pay) on the mortgage, the lender is paid back by the insurer.  With Mortgage Loan Insurance, many buyers who might not otherwise qualify for a loan can still get the financing for their home purchase.  This stimulates the Canadian economy, while at the same time protecting our lending institutions and the stability of our overall federal economy.  

CMHC (Canada Mortgage and Housing Corporation), the federal government’s housing authority, is a major provider of this type of insurance in Canada.  For that reason, Mortgage Loan Insurance is frequently referred to as CMHC insurance.  For more information visit the CMHC web site www.cmhc-schl.gc.ca.

The second type of mortgage insurance -- Mortgage Life Insurance – is optional coverage you can elect to buy if you want to ensure that your mortgage will be paid in full if you or a co-owner dies.  It is essentially term insurance with coverage that reduces with your mortgage principal.  It can be set up as joint coverage for multiple owners, with the benefit falling to the survivor(s) if one owner dies before the mortgage is paid off.  Mortgage Life Insurance is offered by a number of carriers and the rates and coverage will vary according to the insurance company offering the coverage and your own personal information.

Contact me today to learn more about Mortgage Insurance and other home buying costs.  You can even request a free Home-Buyer's Toolkit!

What's Your Home Worth - compared to average sales last month in Kitchener-Waterloo?

Sales numbers were up considerably for April over same time last year, while the average sale price increase was 4.1% for all home types and 3% for single detached home. 

Residential home sales in Kitchener-Waterloo were strong in April, with 539 properties sold. This represents an 11.4% increase compared to April of 2014, and 7.8% above the 5 year average for April.

However, with a total of 1,507 home sales year-to-date in Kitchener-Waterloo, 7.3% above last year’s total for the same period but 4.1% below the 5 year average, the real estate landscape in K-W looks more tempered. 

The spring market is definitely in full swing here in Waterloo Region. We’re seeing sales activity that is fairly steady and consistent comparing to 5-year trends which speaks to the stability of the market here in Kitchener-Waterloo.

Once again sales activity in KW in the $300,000 – $399,999 posted a healthy increase in the month of April with 200 homes sold in that range, a 39.9% increase from the same time last year. Sales in KW included 357 single detached homes (up 14.4 %), 106 condominium units (down 0.9 %), 28 semi-detached (up 3.7%) and 47 freehold townhouses (up 30.6%).

The average sale price of residential sales across the KW area only increased 4.1 percent to $346,702 compared with April 2014. Single detached homes sold for an average price of $392,951 an increase of 3.0% compared to last year. Condominium market prices were up 0.7%, with the average condo unit selling for $231,430.

 Contact me today for a Free Home Value Report or a Home Buyer's Toolkit!

How Much Home Can You Afford?

Part One - Budgeting your Carrying Costs

Finding the right property at an affordable price can sometimes be a challenge. When it comes to deciding just how much home you can afford, there are two kinds of expenses you’ll need to consider – the ongoing or ‘carrying’ costs of the home, and your closing costs.  

The first step in determining your carrying costs is to get pre-approved for a mortgage.  By pre-qualifying for a mortgage, you can find out up front what your maximum mortgage payment might be, even before your home search begins.  Your lender will look at your earnings, credit history and any outstanding debt, and help you determine what size loan you qualify for, at what rate, and what your regular mortgage payments would be.  Being pre-qualified offers another advantage, since it puts you in a stronger negotiating position when you go into an offer with pre-approved financing. 

Once you’re pre-approved, the next step is determining what you actually want to spend on your mortgage payments.  Remember, your pre-approved mortgage establishes the maximum amount of loan you’d qualify for, but you may decide that you want to aim at a smaller loan, with a lower payment. 

Be realistic and think about your lifestyle.  Although it may seem feasible to handle a sizable mortgage payment at first, keeping it up may eventually require cutting back on other expenses, such as clothing, or entertainment.  Make sure that if you plan to make any concessions in these areas, you’re prepared to live with your decision until there’s a change in your income.  Owning a home can give you a tremendous amount of pleasure and personal satisfaction, as long as you plan for adequate resources to enjoy it with some peace of mind.  

With your estimated mortgage payment in mind, the next step is to determineyour total carrying costs.  Add up all your estimated monthly costs, such as the mortgage payment, property taxes, insurance, heating costs and other utilities.  Then add a figure to cover yearly maintenance and upkeep.  Consider both the interior and exterior of the house, as well as the garage, driveway, landscaping and all other aspects of the property when you arrive at this figure.  

When preparing your budget, be sure that you also make allowance for a “contingency fund” to cover unexpected expenses such as a major repair or the replacement of a large ticket item, such as an appliance. Life sometimes has a way of surprising us, and you don’t want to start out with a budget that’s so tight, there’s no room for the unexpected.  

Part Two – Closing Costs and Moving Expenses

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 expenses. 

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 taxesand 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.