Mortgage Rules Are Changing January 1, 2018!

Recently the Office of the Superintendent of Financial Institutions (OSFI) voted to implement new lending rules for home-buyers which will impact the size of home one can afford.  Various scenarios point towards affordability of 20% less home than under the current rules.  This will have a huge impact on being able to acquire your "dream home" and especially for First Time Home Buyers subject to the new "stress test" regardless of how much they put forth for a down payment.

The new minimum pre-qualifying rate is against the higher Bank of Canada 5 year benchmark rate (4.89%) or 200 base points above your current lower contractual fixed 5 year mortgage lending rates.  

There is an exception to this rule if you choose to remain with your current lender at renewal time when re-financing, the stress test will not apply.  But will come into play if you choose to switch lenders at renewal.

For First Time Home Buyers, they have 3 options:

1.  Rent a bit longer to pay down debt and have more income, to pass the stress test.  Or "buy down", for instance a condo versus detached home.

2. Provide a bigger down payment to pass the stress test

3.  Ask a co-signer to come on board to help pass the hurdles of the new rules.

In either case, to avoid any nasty surprises and let downs.... please, please, please do some research, understand the new lending rules and go out and get pre-approved for financing before you start house shopping so you know what you can afford!

As always myself and the team are here to assist, so let us help and show you "Real Estate in Motion" by guiding you through these changing times, to your Dream Home!  Don't delay, the time is now!  

Winning in Todays HOT Real Estate Market - Written by Jennifer Gale

Over the past year, we could feel the market heating up but I'm not sure we were prepared for what is going on! It seems every home listed has the caption..Not Reviewing offers until.... and with this the multiple offer bidding scenario keeps playing out. Lots of buyers are continually losing out on homes...so the question is how do you get an advantage over the competition? The following are a few of the steps that you should take.

  1. Hire a LOCAL Realtor! This is of the utmost importance. A local Realtor understands their market. They know which areas are good or bad, school zones, the sale history of the property and lots of inside a details someone from another community would have no way of knowing. Have your Realtor set you up on prospect system which will send you NEW listings as soon as they are active. Realtor.ca can be on the slow side, this will give you the first opportunity to see new listings.

  2. GET YOUR PREAPPROVAL! This is by far the most valuable thing you can do. Hot market or not you need to be certain of what you can spend and what you're comfortable with. In a hot market however the least amount of conditions you have the better the strength of your offer. Speak to your financial institute or a mortgage broker ( we can refer you) and get this piece of paper. If you already know the property you want to buy and they are holding offers this gives you time to get an actual firm approval on the home prior to the offer.

  3. DO YOUR HOMEWORK! Chances are that prior to calling a Realtor and making your appointment with the bank you've been looking at homes on the internet. That's fantastic, but I suggest take it a step further, become obsessed with the housing market, read articles, go to lots of open houses..this way by the time you are out shopping with your Realtor you are somewhat versed in the market. You're starting to understand market values, seeing what homes are selling for etc. This step will help take out uncertainty when you make an offer..you're going to feel educated and confident you're making a great decision.

  4. HOME INSPECTION! This one can be a bit tricky when faced in a multiple offer situation, but necessary as you are making one of the biggest purchases of your life. This is a Buyer Beware transaction and you need to being going into it eyes wide open. I'm actually surprised more agents are not having their sellers get the inspection and have the report ready for buyers..that's another topic. In a multiple offer scenerio I'd suggest having the inspection prior to making the offer. Again making your offer stronger.

  5. BE CERTAIN! Buying a home is such an emotional experience and it can be tough to navigate those emotions when you're feeling pressure. Remember you drive the car, this is your future, your investment. Just because the market is hot, you do not need to jump on the first house you see in fear of losing an opportunity. I've said it for years..the perfect house will present itself at the perfect time, and when it's right it will be yours!!

  6. HAVE FUN!!! This is gong to be a memory that sticks with you for life, make it a good one! Be easy about it, enjoy the process!!!

Hope these tips help! As always if you have any questions, I'm always available:)

 

TOP 5 USEFUL TIPS FOR TENANTS

Here is a little bit of insight to help you if you are in looking into renting either for the 1st time, relocating or wanting a better rental...these tips will help you be a step ahead

1. Read Your Lease
Read your lease cover to cover before you sign it. It will help you catch potential problems before they actually happen. Most good landlords will work with you on the terms of the lease. If you know you have a special circumstance, such as a family member or friend who visits regularly, tell the landlord about it ahead of time. If the landlord makes any verbal agreement with you, like providing lawn care, make sure he puts it in writing in the lease. Then ask for a copy of the lease for yourself as soon as you sign. Having a well-rounded lease will help you avoid any tenant’s rights issues later on.

2. Don’t Break the Lease
Most renters think of breaking a lease in terms of the big things like not paying the rent, cutting out early or subletting without permission. However, smaller lease points count too. While a landlord can technically evict a tenant for breaking any term of a lease, most won’t. But the better you stick to your lease, the better chance you have of existing peacefully with your landlord.

3. Pay Your Rent on Time
Nothing makes a landlord happier than a renter who pays rent on time every month. Make sure you have the check in the mailbox a few days before it’s due to avoid any mail or bank holdups. You might even score a few brownie points if you pay a few days early. And since no one is immune from financial hardship, if you know you might have to pay late one month, let your landlord know as soon as possible. The landlord may not mind the late payment as much, if you’re upfront about it.

4. Treat Your Rental Like You Own It
Taking good care of your rental will ensure that you get your deposit back when you move out, and it will also put you in good favor with your landlord. While normal wear and tear is typical in rental units, do not cause any major damage to the rental. Damages will eat away at your security deposit and annoy your landlord.

On that same note, keep your rental property clean. This goes double if you have pets. Pet owners typically become de-sensitized to the odor their pets give off, but your landlord will notice it. If your landlord comes in and sees your unit in a good, clean, scent-free condition, he’ll trust you more. And more trust equals more negotiation power when the lease renewal rolls around.

5. Get to Know Your Neighbors
Meeting potential neighbours should always be a part of the plan for finding a new place to rent. I think the odds of having the neighbours call you to complain about the dog – and not the landlord – improve if you meet them in person.

Knowing your neighbors has several additional benefits. You can watch out for each other. If you have to go out of town sometime, your neighbours might keep a better eye on your unit if they know you. Most importantly, establishing a line of communication between tenants reduces the chance of your neighbor escalating a problem to the landlord.

Despite your best efforts to keep quiet, you may upset your neighbors from time to time. Small problems like this can seem like a much bigger deal by the time they get escalated to the landlord. Avoid it altogether and give your neighbors your cell phone number to contact you instead.


 

 

PRICE PRICE PRICE - PRICE to SELL

The Wrong Pricing Strategy Can Cost You Thousands, you probably know, the list price of your property largely affects how quickly it sells — and how much you will receive on the sale.  What you may not be aware of is just how significant price is. Consider the following:

You price your property well above its current market value. As a result, many buyers don’t bother to see it because it’s outside of their price range. Those who do see it are confused by the high price. They may wonder, “What’s going on?”   In this scenario, the home will likely sit on the market for weeks or even months. You might even have to lower the price dramatically to get interest going. 

You price your property a little lower than market value to gain the interest of qualified buyers. That might not seem like much of a problem. How much can a little lower matter?  On a $400,000 property, pricing your home just 2% lower than necessary could cost you $8,000 on the sale. That’s a serious amount of money!  So, as you can see, pricing your home right is serious business. Fortunately, a good REALTOR® knows how to set the right price.  Looking for a good REALTOR®? Call us today.

Is your Dream House Just a Dream - New Lending Rules

Canada's first-time home buyers may have to shelve their dream house fantasies due to lending changes many mortgage brokers say, the size of the mortgage many buyers qualify for will now be less.

 

Ottawa moved last week to tighten mortgage lending rules that will limit the amount many Canadians can borrow to help ensure that when interest rates rise, they'll still be able to make their payments.

Under the new rules, a stress test that had only applied to borrowers who opted for variable rate mortgages or fixed rate mortgages with terms less than five years will now be used for all home buyers with less than a 20 per cent down payment.  That means borrowers must be able to qualify for their mortgage using a higher interest rate than they will actually be paying on their mortgage.  "You're not paying more, but you're going to be able to buy less house," Napolitano said.

The idea is that potential home buyers must be able to show that if interest rates were much higher than they are today, they'd still be able to make their mortgage payments and other costs related to home ownership.

It won't be uncommon for nervous lenders to turn down borrowers who just barely qualify or require a co-signer or a larger down payment.  People who have less than 20 per cent down are going to qualify for a whole lot less money

The changes may mean that you will have to settle for a less expensive property, save for a larger down payment or wait until they are earning more.

 

Make your Home Stand Out


When you’re about to sell your home, it may be disheartening to see so many other properties for sale in your neighbourhood. You may be thinking, “That’s a lot of competition! Will our property get noticed?” Fortunately, there are many proven strategies for standing out in a sea of For Sale signs.

First of all, keep in mind that many home purchasers come from the REALTOR’S personal network of buyers who want to move into your area. So, choosing the right REALTOR® is crucial.

Second, remember that when there are other properties for sale on your street, curb appeal becomes even more important. There are many simple things you can do to make your property look great to those driving around looking at homes. Make sure your property looks as picture perfect as possible. In a competitive market, it’s also more important than ever to highlight features of your home that are unique and enticing. If, for example, you have a large backyard deck and brand new hardwood flooring, make sure these are mentioned prominently on the feature sheet.
 

Finally, be as flexible as you can be when scheduling viewings and open houses. Don’t forget that other listed properties in your neighbourhood draw in buyers, who may notice your home. It’s not uncommon for a buyer to view a property and then scout the neighbourhood. So, you want buyers to be able to see your home on short notice and at a convenient time for them. If there are several other nearby properties for sale, it means things are hot from a real estate point of view. You want to roll out the red carpet to buyers.
 

Looking for help selling your home quickly and for the best price? Call today!

PRICE - Is it the Bottom Line

When it Comes to Offers, it’s Not Always about PriceWhen considering which of two or more competing offers to accept for your home, there is no doubt price plays a huge role. After all, if Offer #1 is $10,000 higher than Offer #2, that’s an enticing difference that puts thousands of extra dollars in your pocket.  However, price isn’t the only thing you should think about when comparing multiple offers. There are other factors you need to consider as well.  For example, what conditions are in the offer? If Offer #1 is conditional upon the buyer selling his current property for a specific amount, then what if that doesn’t happen? You could end up with an offer that dies and be forced to list your home all over again.  In that circumstance, accepting the lower offer may be your best move.   There’s also financing to consider. Most buyers will attach a certificate from their mortgage lender to show that they can afford the home and will likely secure financing with little difficulty. If you get an offer where the ability of the buyer to get financing is in doubt, that’s a red flag.  The closing date is another important factor. Offer #1 might propose a closing date that’s perfect for you, while Offer #2 is four weeks later. If you’ve already purchased another home, you might require a month of bridge financing if you accept Offer #2. There’s nothing wrong with that per se, but the costs and additional hassle are factors you should consider.  As you can see, assessing competing offers isn’t as easy as it looks. Fortunately, as your REALTOR®, I will guide you toward making the right decision.  

Back Yard Entertaining

Now that the back yard is all ready it is time to have some fun it let's enjoy entertaining in the beautiful warm outdoors here some helpful tips to help you decide on the entertaining for you...So if it is just simple entertaining the family outside for dinner, an intimate dinner party or a large group for a full on shindig here are a few things to consider

  1. There is the conversation set they are becoming very popular it is like bringing your living room outside it is a more comfortable place to gather and hang out with friends (and not part of entertaining but awesome to sprawl out on the bench seat with a good book or for an afternoon nap), oh sorry for that ramble back on topic with this is mind like your living room you also want to have some coordinating side tables not just the coffee table so when having a larger gathering everyone has a place to put their drinks and such.

  2. This is like you dining room outside there is nice weather why not just have dinner parties outside. Even if you are preparing the food indoors you can still enjoy the meal outdoors. You can make it even more like the dining room and add a table cloth, candles and some colourful tableware.

  3. Your last option is combining the two if you do not have room for both a conversation set and a dining set outdoors no worries you are covered there are sets that include a dining table, a sofa, 2 end chairs and 2 stools that can be used as extra seating or footstools.

So with these 3 options you are covered from entertaining to relaxing alone or with the family. No matter what you choose there is always the option of adding some matching chairs, benches or stools which are great for seating or side tables if you do have that one extra large summer party.

Get your Outdoor Space Summer Ready

With the weather getting nice I have decided to make the May Newsletter about getting your yard ready so when summer hits you can just put your feet up and enjoy the beauty you have created.

 

Your home is going to be the jewel of the neighbourhood I will keep it simple with just 5 steps, make sure you get the whole family involved.

 

1.  Aeration - This is where you penetrate the soil with small holes, this makes it easier for the water and air to get into your soil. So either rent the aeration tool yourself or I am sure those people will be wheeling their aeration machines around your neighbourhood soon.

 

2.  Weeds – Now is the time to start removing those pesky weeds we all love, you can either do this by hand or use a pesticide. Put down a layer of mulch and this will help prevent wees after all your hard work

 

3.  Trim & Prune – Remove any shrub branches or anything that is dead and overgrown from last season. If you have some flowers that are starting to taking on a life of their own cut them back and start them somewhere else or hand them on to a friend.

 

4.  Driveway – Sometimes after those harsh winters your driveway takes a toll, clean it up of all the debris and give it a good look over for cracks or pits. If you have do have some cracks or minor pits you can head to your local home depot and get the supplies to repair it yourself. If you are not feeling that adventurous then call in the professionals. Taking care of these thing when they are small problems is the way to go.

 

5.  Watering – Make sure you maintain a regular watering schedule to ensure all the your flower, tree and grass roots are strong. This will also help keep your grass looking lush and green when the harsh summer sun comes. Your lawn should get at least 3 cm of water weekly.

 

So get the family started on this 5 step process and you will be the envy of the neighbourhood.

5 Things to Remember for 1st time buyers:

Buying a home can be one of the most stressful challenges, it will be one of the largest contracts you will have to sign into....Make sure you are ready for the financial obligation by following these 5 simple steps it will save you from making a costly mistake and you will just be able to sit back and enjoy the last memories in your new home:

1.  What can you afford:  Make sure that you don't buy more house than you can afford take the extras into account, maintenance, insurance and property taxes just to name a few.

2.  Narrow your priorities:  What is the MOST important Size, neighbourhood, schools, amenities, the list can be overwhelming so make sure you know what is a MUST and what you can live without.

3.  Conduct a detailed home inspection:  Once finances are in order and you have found the must have house do your research on a good home inspector, your realtor will be a great go to for this.  You do not want any unexpected problems.

4.  Ask the seller hard questions:  Ask if there was basement flooding, mould, or roof leaks. They are required to respond truthfully, this will help your home inspector and you will be able to make an informed decision.

5.  Don't forget your Title Insurance:  After the home is yours if you come across any problems that were in the covered in your offer, such as by-law issues you can go through Title Insurance to cover these costs.

Hope this helps you when buying your next home