15 Jan

Homeowner Tips – 10 Easy Ways to Winter-Proof Your Home

General

Posted by: Mike Hattim

1. Close all Curtains during the day and add a liner with cheap thick material for even more insulation. Open them periodically for the greenhouse effect to warm the house.

2. Close Doors when rooms are not in use. This prevents heat transfer in and out of vacant rooms especially if you have baseboard heaters or radiators. Close the vents if using central forced air. Lower the entire house heat and use a space heater if you are only using 1 room like a TV room or bedroom.

3. Stop the Draft! The bottom of doors are not air tight in order to allow them to open and close. Use draft excluders to plug the bottom or even roll up a blanket or towel.

4. Seal Gaps around frames. Doors and windows commonly have gaps that let cold in and heat out. Seal the gaps with cheap insulation strips or even blankets. Stop the draft and save money!

5. Floors are Guilty. Is your flooring insulated? Good chance they are not. Massive heat loss occurs through your floors. Area rugs adds insulation (or blankets) and look for any gaps in the flooring or floorboard and fill with silicone.

6. Reflect the Heat. baseboard heaters or radiators located on external walls will simply warm the wall. Line the wall around the heat source with foil to reflect the heat back into the home.

7. Cover your pipes! Ass an insulator to your hot water tank and pipes to hold the heat in and keep the water warmer longer without fuel. Many inexpensive options are available for all tank and pipe sizes. Make use of blankets if you are on a budget.

8. Use thermostats with timers. Have them turn on earlier so the room heats up in time for use vs. cranking the heat when you need to get warm quickly. Have the heat turn off 30 mins before you are going to bed or leaving the home.

9. Insulate Walls and Attic. On a snowy day go outside and look at your roof. You should see snow on the roof. If you can see your roof that means the attic is not insulated well and heat is escaping and melting the snow. Invest in good insulation to save big money in the long run.

10. Oven is made for Heat! Winter time is full of yummy cozy meals made in the oven. When the meal is done why not leave the oven door open after you turn the over off. The heat from the oven will warm a room for a good hour after it’s shut off.

15 Jan

Improving your credit score isn’t as hard as you think!

General

Posted by: Mike Hattim

If you’re credit challenged but want to get into the housing market, it can be a tough road. But improving your credit to a point where a lender will give you a chance, is very doable.

Basically, what you need to know is a score above 680 puts you in a good position to get financing, while below will make it tough and improvement is needed.

Your credit score tells lenders some basic stuff about your credit: How long you’ve had credit, your ability to pay back that credit and how much you owe. And so your credit score is affected by how much debt you’re carrying in regards to limit, how many cards or tradelines you have and your history of repayment. If you’re a young person and new to the world of credit, consider the 2-2-2 rule to help build up your credit. Lenders want to see two forms or revolving credit, like credit cards, with limits no less than $2,000 and a clean history of payment for two years. It’s also good to note, a great credit score will also include keeping a balance on all those cards at any given time below 30 per cent of the limit.

To ensure your score stays in playoff form, make sure to pay off any collections, like parking tickets, and correct any old or incorrect reporting on your credit score by contacting Equifax to have it removed.

Some people also forget their credit cards have an annual fee and fail to pay them off too. This cannot

be stressed enough, if you want to keep or attain a good credit score, you have to pay your credit cards or tradelines on time regardless of whether you owe $1 or $1 million.

Debt and credit often go hand-in-hand. There is also such a thing as good debt and of course bad debt. Good debt consists of things like a mortgage, investment property, and college/university tuition. Bad debt includes, retail store credit cards, cars, and vacations. There is a tendency when things get really bad to consider declaring bankruptcy or a consumer proposal. A consumer proposal is a formal, legally binding process to pay creditors a percentage of what is owed to them. You really want to avoid these two options. Instead, there are companies out there that will perform the same function and negotiate your debts, but it won’t impact your credit or carry the stigma of bankruptcy or a consumer proposal.

Lastly, if you already own a home and have some equity, but you’re still drowning in credit debt, consider refinancing your mortgage. Sure, you might not get the great rate you have now or you might get dinged for breaking your mortgage early, but using the equity in your home to get rid of high interest credit payments could keep more money in your pocket at the end of the day. To change your debt-to-income ratio, consider stopping all credit card activity and don’t rack up any additional borrowing.

15 Jan

Changing your financial direction

General

Posted by: Mike Hattim

If you live paycheque to paycheque, the idea of somehow having enough money to invest and eventually have financial freedom seems about the furthest thing possible. But experts in financial education like to point out, no matter your income and place in life, a few changes to the way you’re living life can make all the difference. No matter where you are in life, it’s never too late to start learn and reverse course. If you’re still not convinced, there are a few simple ideas to get you started.

Pretend You Earn Less Than You Do

Give yourself a cut in pay. The goal is to put 10% in savings from each paycheque into your savings account. The easiest way is to do an automatic direct transfer from your chequing account to your savings.

Create a Budget

In order to stop living paycheque to paycheque, you need to know where that paycheque is going. Creating a budget is simple with Google docs, or look into other online tools and sites to get started.

Build an Emergency Fund

Once you have your budget in place, review it and break it down into non-discretionary expenses (rent, groceries, utilities, etc.) and discretionary expenses (eating out, entertainment, clothes, etc.).

See where you could cut down on eating out and put that money towards your fund. Even starting with just a little amount is great and helps you build the habit.

Consider Downsizing

It may be time to consider a lifestyle change. Consider moving to a smaller place. Replace going to that expensive gym with a trip to the local park. Think about if you really need that brand new car or if a used one would work just as well.

Pay Down Debt

If you have a lot of credit card or unsecured debt, try paying the minimum on all but one of them and aggressively pay down that one card. Once it’s paid off, attack the next one. If you’re so deep in debt that you can’t fight your way out, consider consulting with a company who specializes in debt consolidation. They will help you negotiate your debt into smaller amounts that you can begin to pay off.

Don’t Forget Your Future

Putting at least 3% of your paycheque into a retirement fund is a great idea, or maybe when you get your first raise instead of thinking of it as free money, simply put it into a fund and forget about it. You’ll be glad it’s there when you need it in the future.

3 Dec

Pride in ownership can pay off

General

Posted by: Mike Hattim

Any prospective homebuyer knows this situation well. You’re set up for a viewing but when you get there the condition is less than ideal. Maybe the toilets are dirty, or the cluttered kitchen is hiding its full potential. Immediately, you’re turned off and you’ve moved on to another property.

For the owner, that’s sale opportunity lost.

In a lot cases, buyers can’t really see beyond what’s in front of them. A messy place not only makes your home harder to see, it can cost you money.

Depending on who you talk to in the real estate industry, a messy home compared to a clean house could fetch up to a $20,000 swing.

That’s a lot of money for a weekend of washing walls, decluttering, taking the trash out, running the vacuum and putting some elbow grease.

There are few simple things during this time of year that can help make your home stand out above the rest.

1) While winter can be lovely, it can also get a little messy. Especially around the yard with all those snowy and muddy days. If you want to boost the curb appeal before prospective buyers step foot in your home, you’ll want to make sure you clean your walkways. Don’t be afraid to take advantage of a dry day to keep your garden looking presentable. A little maintenance goes a long way!

2) Winter is all about colour. It’s time to put away all those bright colours for the more earthy tones of

the season. If you’re not sure, those are browns, greys, orange and greens. Change your bed spreads, pillows and rugs to match the season. It doesn’t hurt to throw up a fresh coat of paint or an accent wall in an olive or burnt orange hue.

3) Winter also seems to have a smell. And you can recreate that in your home. The fresh scent of cinnamon or ginger are perfect for the season. You don’t want to go overboard, but nothing feels more welcoming then a home that smells of love and food. You can also decorate your home with the fruit of the season in a decorative bowl. It doesn’t even have to be in the kitchen. It can be right at the front entrance.

4) The change of season is a great time to make sure your maintenance is up to date. For the exterior, that means cleaning your gutters, windows and deck. If you have a pool, making sure it’s properly covered and tucked away for the winter. Inside, make sure the furnace and all your electrical components are working including your appliances. Nothing turns off a buyer more than looking at a home in disrepair.

5) The days are short and the weather tends to be a little unpredictable, so you’ll want to ensure your home is bright. If you’ve got some burned out lights both inside and out, replace them. And before a buyer comes in for showing, turn on all your lights. Keep your blinds and curtains open to let in as much light.

If you’re about to put your prized possession on the market, treat it like one and take pride in ownership.

3 Dec

The great debate: Gen-x Vs. Millennial

General

Posted by: Mike Hattim

If you’ve ever been around a Gen-Xer and Millennial together, you’ve probably heard this debate before: Who had it easier trying to get into the housing market?

Undoubtedly, the millennial will claim there is no struggle greater than the one they currently face, while the Gen-Xer will tell their younger cohort that they are spoiled and don’t understand how hard it was to adult in the 90s.

So, are millennials better or worse off than Gen-Xers at the same age?

A report earlier this year from Stats Canada set out to settle the debate with some interesting findings.

For starters, the study found on average young millennials earned more than young Gen-Xers. Specifically, Gen-Xers between the age of 25 and 34 in 1999 earned on average $51,000 annually compared to millennials who earned $66,500 in 2016.

The study found that millennials in 2016 also had higher assets and net worth then their grunge-era counterparts in 1999 at $154,000 to just $76,700 respectively.

However, millennials were found to be more indebted, with a debt-to-after-tax-ratio at 216 per cent compared to 125 per cent for Gen-Xers.

The study also found millennials are taking on larger mortgages then previous generations. The median mortgage debt on the principal

residences of a millennial between the ages of 30 and 34 in 2016 was $218,000 compared to $117,500 for Gen-Xers in 1999.

Interestingly, though their median net worth is higher, there are greater differences in economic well-being among millennials, specifically, millennials in the top 10 per cent held 55 per cent of all total net worth accumulated by their generation.

The study also found that millennials are entering the housing market at similar rates as previous young generations.

So, who can claim the biggest hardship to getting into market? That would depend on how you want to spin the facts. Instead, maybe the key is in the finding that millennials are getting into the market at the same level as their parents and grandparents did before them.

Of course, there have been a number of market factors and challenges each generation has had to face. Consider late boomers trying to get into the housing market with interest rates at nearly 20 per cent in the early 80s, or the recession and economic malaise of the 1990s.

At the end of the day, and this study proves it, young people in every generation have found a way to look past the challenges in their face, and fulfill the dream of homeownership. And if you’re a young person ready to buy or soon to be, a mortgage broker is your best bet to help get you there.

11 Nov

Homeowner Tips – Let the heat reach you.

General

Posted by: Mike Hattim

Dust or vacuum radiators, baseboard heaters and furnace duct openings often and keep them free from obstructions such as furniture, carpets and drapes.

Replace/Clean Furnace Filters:
Check and clean or replace furnace air filters each month during the heating season. Ventilation system filters, such as those for heat recovery ventilators, should be checked every two months.

8 Nov

Using the interest on a second mortgage as a tax write-off

General

Posted by: Mike Hattim

We all know owning a second rental property is a great way to invest and build your wealth portfolio. Unfortunately, a lot of homeowners sitting on plenty of equity are afraid to use that money for a downpayment to purchase a rental or investment property. The idea of a second or third mortgage tends to spook people away. While there are always financial risks in any investment, there’s a little-known incentive that might make you take the leap from homeowner to real estate mogul.

You can expense the interest on a mortgage as long as the INTENT for the funds are used on an investment property.

Thus, when you’re refinancing or taking equity, you can pull money from your existing owner-occupied home and use the funds on a rental property. Now the interest on the money you pulled out (and only that money, not any existing money) can be written off or expensed against your rental income.

You could expense your rental income down to a negative which in turn lowers your overall taxable income. Putting even more money back into your pocket.

It might only lead to a savings of a few hundred dollars a month, but not many people know it’s an option and is an extra incentive to consider.

You’ll definitely want to talk to your accountant and your mortgage broker to get more details.

There are also a few things to consider if you’re going down this route for an investment property.

You must claim your rental income on your tax return. It’s tax evasion if you don’t.

Mortgage rates are also typically cheaper for owner-occupied homes compared to rental or investment homes. Don’t be tempted to tell your broker or lender the house use will be owner occupied when it will actually be a rental because you want the lower rate. That is mortgage fraud. You could get charged and or the lender could call the balance.

While taking on a second or third mortgage might seem a little daunting at, there are some options available to save you money and your mortgage broker can help.

7 Nov

Should you go fixed or go variable?

General

Posted by: Mike Hattim

It’s the first and only thing anyone usually asks when you talk about your mortgage: What’s your rate? While everyone can recall their rate off the top of their head, it’s the only detail of the mortgage they remember or care to know. Though the rate is obviously important, your mortgage is so much more than a rate, and if you’re not paying close attention, it can cost you money.

Before we dive deeper, let’s talk fixed rate vs. a variable rate and which one is better. Well, that all depends. First-time homebuyers and older homebuyers typically love the stability of a fixed rate. Keep in mind, seven-in-ten fixed mortgages are broken before the term ends. A fixed rate for five years is fine as long as you stick with a lender that’s going to calculate the penalty if you break your mortgage on the contract rate versus the Benchmark rate. That’s because the Benchmark rate, or as it’s sometimes called the Bank of Canada rate, is higher than your contract rate. Typically a credit union or monoline is the right choice for this mortgage.

Variable rates are great with any lender as it just comes down to who offers the best discounted variable rate. There’s a pretty simple way to decide whether a variable or fixed makes sense, based on rate alone. It’s called the 50-basis point rule.

Basically, take the best fixed rate out there and the best variable rate out there and subtract the two. If the number is less than 50 basis points, there is strong argument to go for a fixed rate. However, if the difference is more than 50 basis points, there’s a solid case to go with a variable.

Pretty simple right? What’s not as simple is the personality of your mortgage. It may not seem like it, but yes, your mortgage has a personality. Think of it like a shiny sports car. It may look amazing when it rolls off the lot, but as the years go on, does it meet your daily needs? Besides your mortgage rate, you need to consider portability, and whether it can be blended and extended and how penalties for breaking the mortgage are calculated. When people start looking for a mortgage, they’re usually getting advice from friends or their parents, and the only question they’re asking is, what’s the rate? But if they don’t know the details of the mortgage like the ones listed above, you can tell them to stick their head in the sand, because they’re giving you bad advice. And if a mortgage broker is only fixated on the rate, you’re working with the wrong one.

Life happens and our circumstances change. You really want to make sure the mortgage will work for you in the future before you sign on the dotted line.

29 Oct

NEED AN APPRAISAL – 7½ TIPS FOR SUCCESS

General

Posted by: Mike Hattim

Do you need to get a current value of your property? Then you are going to need an appraisal.

Banks and other lending institutions want to know the “current” market value of your home before they consider loaning money on the property. An appraiser checks the general condition of your home and compares your home to other similar homes which have recently sold in order to define a comparable market value for your home.

Here are 7½ tips that can help you get top current market value.

Short version – Prepare your home as if it was going to be sold!!

Long version… If a picture is worth a thousand words, think what kind of story the pictures from your home are telling?

In the world of mortgages, lenders seldom set foot on the property before making a loan decision.

Instead, they rely on their trusted list of approved appraisers. All a lender usually gets is the appraiser’s pictures of your property and their comments about how your home was appraised.

Tip #1 – Clean up. The appraiser is basing the value of your property on how good it looks. Before the appraisal, prepare your home as if you’re selling it. Clean and declutter every room, vacuum, and scrub. Do whatever you can to make your home as presentable as possible.
Tip #2 – Pay attention to curb appeal. An appraisal is all about first impressions. And the very first one the appraiser gets is when they walk up to your property. Spend an hour or two making sure the outside of your house, townhouse or condo is warm and welcoming.

Tip #3 – The appraiser must be able to see every room of the home, no exceptions. Refusal to allow an appraiser to see any room will be noted in the appraisal can be a game stopper. There are times when it is not appropriate for the appraiser to take pictures of certain things and appraisers and lenders understand this, but refusal to grant access could kill your deal.

Tip #4 – Make a list of upgrades and features. It’s important that the appraiser is made aware of any updates you’ve made, especially those which are hidden, like new plumbing and electrical. If possible, give the appraiser this list. That way they have a reference as to what has been updated and how recent or professional that work was done.

Tip #5 – If you need to spend to update, be prudent. Many people think “bathrooms and kitchens” are the answer for getting high prices on home value. They aren’t. First, consider that kitchen and bathroom remodels can be some of the priciest reno costs. For that reason, it may be more prudent to spend a bit of money, for just a bit of updating. Paint, new flooring, new light or plumbing fixtures don’t break the bank, but can provide a dramatic impact and improve your home’s value.

Tip #6 – You know your neighbourhood better than your appraiser does. Find out what similar homes in your neighbourhood have sold for. Your property might look like one down the street, but if you believe the value of your property is worth more, let them know why.

Tip #7 – Lock up your pets. I’m sure most appraisers like pets, but some may be put off by your cat rubbing against their leg or the dog barking or following them around.

Tip #7½ – One last tip – don’t annoy the appraiser with questions and comments and follow them around. Instead, simply be prepared to answer any of their questions and, if you do have concerns or queries, wait until they’ve completed their viewing of the property, then ask.

Mortgages are complicated, but they don’t have to be… Engage a Dominion Lending Centres mortgage expert!

By Kelly Hudson

24 Oct

WHAT THE ELECTION RESULTS MEAN FOR YOUR MORTGAGE

General

Posted by: Mike Hattim

With all the news we have seen on the election, I thought I would sum it up from a mortgage industry perspective.

What the liberal win means for your mortgage:

1. We will see the continuation of the First Time Home Buyers’ Incentive. Check out the link for more information at https://www.placetocallhome.ca/fthbi/first-time-homebuyer-incentive

2. Property Transfer Tax modifications were on the platform, so we will await the date that change is applicable.

3. Consumers will still be able to withdraw up to $35,000 from their RRSPs as part of the government’s Home Buyers’ plan.

4. Bank of Canada Rates may not decrease as expected this year – unless there is a significant downtown in the market suddenly- based on the snapshot of recent activity that doesn’t appear as likely. It certainly makes it easier for the lenders not to pass the decrease down the line to the consumer.

5. We will likely see a national housing tax implemented in addition to the provincial ones already in place.

For items 1, 2 & 5, here is a link. https://globalnews.ca/news/5893892/trudeau-liberals-first-time-homebuyers-program-expansion-campaign-promise/

It doesn’t appear we will see any of the changes to the stress test or amortization hoped for by many.

Stay tuned for more updates and what the BOC decides to do Oct. 30 and Dec. 4.

While the constant in our market will always be change, Dominion Lending Centres mortgage professionals are here at the frontlines to help you navigate the market to your advantage and save you money. Please reach out to us with any mortgage questions on how we can help you or those you care most about.

By Angela Calla