The spring house hunt is here in markets across Canada. For those navigating the home purchase process, this week we look at additional home buying tips:
6. Borrow up to $25,000 for your down payment from your RRSP – tax-free! If you are a first-time buyer, the Homebuyers Plan (HBP) allows you to withdraw up to $25,000 from your registered retirement savings plans (RRSPs) to buy or build your home. An Invis mortgage professional can tell you more about this program.
7. Understand closing costs. When buying a home, it pays to be informed about closing costs, which can represent up to three per cent of the purchase price, including: land transfer tax, lawyer's fees, appraisal fees, title insurance and home inspection fees.
8. Know your financing options. Many lenders offer mortgages which feature a 5% down payment, or in some cases 100% financing. If you borrow more than 80 per cent of the purchase price, your mortgage must be insured, typically by the Canadian Mortgage and Housing Corporation (CMHC), Genworth Financial or Canada Guaranty.
9. Don't do it alone – explore the benefits offered by mortgage brokers. Mortgage brokers act as a one-stop shop for planning advice and the best rates. Invis mortgage professionals work with prospective homeowners across Canada to provide valuable advice before and during the home buying process.
Rick Moran, AMP, OMB # M08001997
Tuesday, May 31, 2011
Thursday, May 26, 2011
Buying a home? Here are some things you need to know (Part I)
For most Canadians, buying a home is the single largest financial transaction they will ever encounter and it's critical that prospective homebuyers prepare themselves before they start their search.
This week we look at the some tips for those navigating the home buying process:
1. Know what you can afford. A mortgage pre-approval offers peace of mind by helping you determine the price range of homes you can shop for and the maximum mortgage you can afford. Remember that final mortgage approval is also based on your information and the property that is to be mortgaged.
2. Lock-in a mortgage rate before you begin shopping for a home. Many financial institutions will lock-in a rate for up to 120 days when pre-approving potential borrowers for a mortgage. Remember to renew the 120-day period if mortgage rates fall during this time, or better yet let an Invis mortgage professional do this for you.
3. Be specific about your lifestyle needs. Remember to consider not just the home itself but the property as a whole, including the neighbourhood and its proximity to work, shopping, restaurants, and other important places you'll be spending your time at.
4. Don't confuse an appraisal with a home inspection – you need both! An appraisal determines the worth of the property by estimating the market value of the land and building. A home inspection inspects the adequacy and condition of the building and all major systems.
5. Place conditions on your offer. Conditions provide you with the flexibility of withdrawing your offer if you are unable to obtain the necessary financing, or if the inspection reveals structural problems with the home. Even with pre-approval, homebuyers who make an offer without conditions do so at their own risk.
Part 2 coming next week.
Rick Moran, AMP, OMB # M08001997
This week we look at the some tips for those navigating the home buying process:
1. Know what you can afford. A mortgage pre-approval offers peace of mind by helping you determine the price range of homes you can shop for and the maximum mortgage you can afford. Remember that final mortgage approval is also based on your information and the property that is to be mortgaged.
2. Lock-in a mortgage rate before you begin shopping for a home. Many financial institutions will lock-in a rate for up to 120 days when pre-approving potential borrowers for a mortgage. Remember to renew the 120-day period if mortgage rates fall during this time, or better yet let an Invis mortgage professional do this for you.
3. Be specific about your lifestyle needs. Remember to consider not just the home itself but the property as a whole, including the neighbourhood and its proximity to work, shopping, restaurants, and other important places you'll be spending your time at.
4. Don't confuse an appraisal with a home inspection – you need both! An appraisal determines the worth of the property by estimating the market value of the land and building. A home inspection inspects the adequacy and condition of the building and all major systems.
5. Place conditions on your offer. Conditions provide you with the flexibility of withdrawing your offer if you are unable to obtain the necessary financing, or if the inspection reveals structural problems with the home. Even with pre-approval, homebuyers who make an offer without conditions do so at their own risk.
Part 2 coming next week.
Rick Moran, AMP, OMB # M08001997
Tuesday, May 17, 2011
Canadian Mortgage Borrowers Exhibit Confidence
Many Canadians are aggressively reducing their mortgages by making lump sum payments, increasing monthly payments and reducing amortization periods, revealing confidence and financial flexibility in a stable mortgage environment, according to a recent survey by the Canadian Association of Accredited Mortgage Professionals (CAAMP).
Survey Highlights
· 22 per cent of mortgage borrowers increased their payments during the past year; 18 per cent made a lump sum payment; 9 per cent did both and 27 per cent who renewed increased their payments;
· For mortgages repaid in the last 20 years, one third were paid off early;
· Home Equity Lines of Credit (HELOC) represent 22 per cent of all mortgages, making these lines of credit a $215 billion industry;
· On average, Canadian homeowners have $222,000 in home equity, equal to 66 per cent of the value of their homes;
· During the past year, homeowners borrowed $26 billion in additional equity from their homes. 15 per cent of homeowners withdrew equity, averaging $30,000;
· Investments (28 per cent) replaced debt consolidation (19 per cent) as the number two use of home equity takeout. Home renovations remain number one (36 per cent).
"Prudent management of their mortgage debt has paid off for Canadians," said Jim Murphy, AMP, President and CEO of CAAMP. "By taking advantage of low interest rates, we have been paying down our mortgages. As economic confidence returns in Canada, many survey respondents have told us they now feel comfortable using some of that equity to improve their homes and to invest," said Murphy.
Survey Highlights
· 22 per cent of mortgage borrowers increased their payments during the past year; 18 per cent made a lump sum payment; 9 per cent did both and 27 per cent who renewed increased their payments;
· For mortgages repaid in the last 20 years, one third were paid off early;
· Home Equity Lines of Credit (HELOC) represent 22 per cent of all mortgages, making these lines of credit a $215 billion industry;
· On average, Canadian homeowners have $222,000 in home equity, equal to 66 per cent of the value of their homes;
· During the past year, homeowners borrowed $26 billion in additional equity from their homes. 15 per cent of homeowners withdrew equity, averaging $30,000;
· Investments (28 per cent) replaced debt consolidation (19 per cent) as the number two use of home equity takeout. Home renovations remain number one (36 per cent).
"Prudent management of their mortgage debt has paid off for Canadians," said Jim Murphy, AMP, President and CEO of CAAMP. "By taking advantage of low interest rates, we have been paying down our mortgages. As economic confidence returns in Canada, many survey respondents have told us they now feel comfortable using some of that equity to improve their homes and to invest," said Murphy.
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