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  • Who is buying all these new homes in London ?

    Who is Buying Real Estate in London Ont and across Canada?


           Often when I'm driving around a new subdivision in London Komoka,  or Hydepark with clients they often ask me who's buying all these homes?

     The answer according to the Canadian Association of Accredited Mortgage Professionals is that first time buyers represent forty five percent of the Canadian housing market,

     According to this new study of the approximately 620,000 homebuyers per year, 45% (280,000) are first-time buyers. Most of these buyers are between the ages of 25 and 34, although first-time buying also extends into the 45 to 64 age group.


    Just over 1\5 of homebuyers (130,000 per year) are making their second purchase. Most of this activity also occurs in the 25 to 34 age bracket. It would be interesting to have reliable statistics in regards to why these people are buying their second house. From my experience of over 20 years as a realtor my guess would be:

    1. Moving to a larger home. 

    2. Relocation due to work, schools and kids recreational activities. 

    3. Divorce and job loss.


    Third-time and greater purchases account for one-third of buying (210,000 per year). This activity tends to occur in the 45 to 64 age group. Which makes sense as you need to be older to have the buy and sell history. In this 45 to 64 age group it would be interesting to know how  and who is many of them are downsizing at this point and how many are looking for new homes?

    Evidently as you get close to the 64 and above age group they would be more inclined to be downsizing.

  • London Ontario Real Estate Market Improves

    A improving job market and increasing numbers of first-time home buyers have begun invigorating the London area’s real estate market, causing it to outshine the rest of Southwestern Ontario.

    Communities such as Windsor, Kitchener-Waterloo, Hamilton and Ottawa have fallen behind.  London-St. Thomas has racked up 12 consecutive months when home sales have outstripped the same month in the previous year.

    "It’s all about revival in the London economy and continued low mortgage rates," said Carl Vandergoot, president of the London and St. Thomas Association of Realtors (LSTAR). “People are gaining more confidence in the London economy, and that allows consumers to make the move into purchasing a home. I think most of the bad news is behind us.”

    Anthony Passarelli, a regional analyst for Canada Mortgage and Housing Corp said "a brutal winter got 2014 off to a rough start but prompted pent-up demand in the spring that was sustained by solid job growth that kicked in by the fall. Jobs growth is stimulating demand, especially for first-time buyers in the lower price ranges. People with a steady job and down payment are coming off the sidelines.”

    The number of homes sold in London-St. Thomas in April improved 15.3% compared with April 2013.

    LSTAR reports 964 homes sold in April, including 776 detached and 188 condos. Vandergoot said it was the best sales total for an April in five years.

    The average price for a detached house was $278,094 while the average price of a condo for the same period stood at $184,982.

    The average year-to-date price for all home types in London-St. Thomas is $259,704, up 2.2%.

    Sale listings were up 5.4% in April while inventory were down 0.2%.

    "The London-St. Thomas market continues to be balanced between buyers and sellers," Vandergoot said. “However, supply does seem to be tightening up a little, meaning that if anybody’s thinking of listing their home, now might be an excellent time to do it. Prices are still much lower than most large Canadian cities, attracting outside investors and retirees who see London housing as a good value"

    London and St. Thomas Home Sales

    (increase over same month in 2014)

    2015

    2014

    April 964 (15.3%)

    December 475 (14.7%)

    March 769 (15.5%)

    November 577 (4.7%)

    February 535 (7.4%

    October 698 (8.4%)

    January 475 (24.3%)

    September 682 (11.1%)

     

    August 791 (13.6%)

     

    July 980 (24.4%)

     

    June 981 (23.4%)

     

    May 988 (5%)

  • Condo for Rent Downtown London

    http://photosrv.mresdms.com/photosrv/LDON/l/2804266b.jpg
    MLS® #: 558949
    Price: $2,500
    Lease Price: $2,500
    Status: Lease
    Major Area: LN
    District: E
    Sub-Dist: F
    Prop Is: For Lease Only
    Legal Descr.: UNIT 2 LEVEL 8 CONDO PLAN 608 BLDG 250 MIDDLESEX
    Address: 250 PALL MALL ST # 802
    City: LONDON, N6A 6K3
    Sd/Rd: North
    Near: RICHMOND
    Nearest Town: N/A
    Prop known as: DOWNTOWN
    Prop. Size: COMMON
    Acreage: Less Than 1 Acre
    Zoning: BDC1
    Taxes: $4623 (2013)
    Occupancy: Owner
    Start Date: 25-MAR-2015Possession: 30 DAYS

    Fully furnished with stylish leather couch and matching pieces may be available short term executive lease Panoramic views towards Victoria Park from gorgeous wrap-around balcony with North & West views of the city! Executive condo living Spacious open concept great room & gourmet kitchen boasting rich coffee-tone maple shaker-style cabinetry, oversized breakfast bar with warm granite counters, wine fridge, impressive designer details & stainless appliances! Oversized ceramic tile, Crown moulding. Newer hardwood in bedrooms & hallway! Spacious master suite with beautiful views. Spa-style ensuite with separate tub, glass shower, travertine tile, granite counter, heated floor & designer faucets! Guest bath offers updated vanity, granite & designer faucets. Walk-in storage area with in-suite laundry. Welcome to downtown London-Victoria Park, Theatre, Farmers Market & fabulous restaurants! Direct bus to UWO .FREE visitor parking Condo fee gas,electric basic cable included in rent

     

     
     
     
     
    Listing Office: AROS REALTY LTD. 519 657-8899Listing Agent: JIM STRAUGHAN 519-657-8899 Pager:

     Tour Video: https://www.youtube.com/watch?v=Vhu3_C1TgPk

    Listing: http://www.straughan.ca/Listing/ViewListingDetailsAuthenticated.aspx?preview=true&listingid=157316030

  • London Ontario History

    Located in the Quebec City-Windsor Corridor, London is situated in Southwestern Ontario.

    According to the 2011 Canadian census, the city has a population of 366,151 people. In the the seat of Middlesex County, London is at the forks of the large Thames River and roughly halfway between Detroit, Michigan and Toronto, Ontario.Lake Huron Resort destinations such as Grand Bend  and Bayfield(http://www.bayfieldcottageforsale.ca/) on Lake Huron are with in short drive. Middlesex County municipality is nearby, though it is a politically separate municipality.London is serviced by numerous bedroom communities such as Komoka(http://www.komoka.com),Kilworth,Delaware,Mount Brydges,Ilderton,Lucan,Dorchester and St Thomas.

    London however remains the official county seat for the area. First settled by Europeans between 1801 and 1804 by Peter Hagerman, London became a village in 1826. London has thrived since then, going on to become the largest Southwestern Ontario municipality. London is Canada's eleventh biggest metropolitan area, consuming many of the smaller communities nearby. The city has developed a strong focus towards education, housing both Fanshawe College and the University of Western Ontario. Both schools contribute greatly to the city's reputation as an international learning center geared towards higher education. The schools also bring the spotlight to London via scientific research and cultural events. London is also a great area for travelling, health care and manufacturing. London holds a number of musical and artistic performances, in theaters such as the Grand Theatre on Richmond Street, in downtown core. London's many musical and cultural festivals are a boon to its tourism, Though the majority of London's economic activity is focused on education, insurance, medical research and information technology. The university and hospitals are some of London's top employers. It lies at the intersection of Highway 402 and 401, connecting it to Windsor, Toronto, and Sarnia. London has an international airport, train and efficient bus station.

    The present site of London was occupied by numerous Odawa/Ojibwa villages before European settlement in the 18th century. Investigations performed by archaeologists have revealed that aboriginal people may have lived in the area for the past ten thousand years. London's current location was initially picked as the site for the future capital of Upper Canada in 1793 by Lieutenant-Governor John Graves Simcoe. Simcoe had intended to name the area Georgina, in honour of King George III, and named the Thames river. However, the choice of a capital amongst the large amount of hardwood forests was rejected by Guy Carleton, the Governor of Dorchester. In 1814, there was a battle during the War of 1812 in what is now south London at Hungerford Hill, which is now called Reservoir Hill.

  • Finding the Right Neighborhood

    Even if you think you have found your dream home, the neighborhood should be examined just as closely as the home itself. Neighboring houses and business will have a huge affect on your lifestyle. Is the area increasing in homes pricing or decreasing? Are there good places to eat and play nearby? There exist numerous useful tools and apps to help with this but it is important to approach your research in a organized and hands on method.

    Here are six steps to aid in researching a neighborhood.

    1. Clearly identify what you want from a neighborhood. Take some time identifying the things that make a home and a neighborhood desirable to you. Know what you want and don't allow your desires to drowned out by a surplus of information. Despise homeowners associations? Enjoy the security of a gated community? Enjoy the prestige of an older home compared to a new model?
    2. Make an additional list of the things you need nearby, both within walking distance and within reasonable driving distance. How far are you willing to go to get to school, sports facilities and parks, grocery shopping, and retail centers? Would you feel bereft if you lived far away from a particular type of restaurants or a convenient coffee shop?
    3. Investigate the reputation of nearby schools. If there’s a easy way to identifying a good neighborhood, it’s a neighborhood with prestigious schools. Even if you don’t have kids, good schools are indicators of good neighborhoods. toRealtor.com says homes in good school districts typically hold their value better than those in less highly regarded districts, and a 2013 Redfin real estate company survey showed Americans pay $50 per square foot more for homes in neighborhoods with top-ranked schools.
    4. Consider transportation  methods. Do you have easy access to a car, and how much driving are you willing to do? Are you willing to sacrifice the distance you drive to gain other home and neighborhood bonuses?  Is public transportation nearby for your family's convenience? Are the activities and resources you frequent during a normal week nearby?
    5. Neighborhood search apps or websites can help narrow the field. Rating and search tools work best for neighborhoods in urban areas with lots of reviews, but you never know when you’ll find a thumbs-up or thumbs-down that flags something that’s important to you. TryNeighborhood Scout, Street Advisor, and Neighborhoods.
    6. View neighborhoods at multiple times of day and different days. Whether you’re looking for an active, neighborly area or a peaceful refuge, the only way to be sure what an area is like is to do some sleuthing in person. Try to visit with a few of the residents, if anyone is out and about, and ask what they like and dislike about the neighborhood. Check or ask about problems like barking dogs and late-night noise.

     

     

     

  • London MLS Listing and Sales Update for real estate in the of Middlesex and Elgin counties.

     The following chart, based on data taken from CREA's National MLS® Report for January 2015 demonstrates how homes in London & Komoka Middlesex  continue to maintain their affordability compared to other major centres in Ontario and Canada.


                                             .

    In spite of darn cold weather , a total of 535 homes sold in February in the London Ontario real estate market. Considering that the average number of February sales over the past decade stands at 489  properties it's  reasonable to describe February 2015 as a good, solid month for home sales In the London and  St. Thomas market .Also up for February were listings by 6.2% - while inventory - active listings end of period – was down a marginal 1.3%. The market continues to be a balanced one.London's  neighboring City of St. Thomas. saw 54 homes sold last month, making it the best February on record for St. Thomas since 2007, The average price of a home in St. Thomas Year to Date stands at $203,008, up 1.6%."

    House Style       Units Sold                Average Price


    2 storey              127                              $331,566

    Bungalow            92                              $204,146


    Ranch                  56                              $304,311


    Townhouse         38                              $155,442


    High rise apt. Condo    27                   $154,267

    The average price of a home in the, Middlesex and Elgin Counties, stands at $248,056 Year-to-Date, down 2.4%. The best-selling house style in  London real estate market for February 2015 was the two-storey, then the bungalow, followed by ranches, then townhouse condominiums, then high rise apartment condos.





  • NO DOWN PAYMENT MORTGAGES for London, Ontario Real Estate

    Yes ,you can purchase a home with no or little down payment!

    Why wait for mortgage rates to go up ?

    Why Rent When You Can Own? 

    Build Equity now before prices go up .


    With over 20 years experience  in residential ,commercial recreational  and farm real estate I can introduce you the most professional and experienced  mortgage professionals tailored to your needs .Don't leave this to chance !

    I have helped hundreds of clients ,friends and or relatives !

    If you have a good credit rating and stable income, you may qualify to purchase a property with no down payment using a Cash Back Mortgage. 

     You will need to show that you have enough money to cover your closing costs (about 1.5% of the purchase price).

    ADDED BONUS  Buy with myself as your buyers realtor (agent) and earn up to $ 3,000 cash rebate on a $ 400,000 ,  $ 1,500  on a $ 200,000 purchase etc .***


    When one applies for a cash back mortgage, the mortgage lender provides you with a specific sum of money upon funding of the mortgage. The amount you receive is based on a percentage of the mortgage purchase  price . 


    Since the minimum down payment required is 5%, the lender provides you with a 5% cash back that is payable to your lawyer on closing. Therefore, you are purchasing a property with 100% financing. These are called cash back or zero down payment mortgages and can make home ownership an affordable reality. The cash back amount is paid over the term of the mortgage by way of a higher interest rate.



    The 100% Financing Mortgage Option in the London ,ONT real estate market may be the right fit for you if you:


    • You do not wish to use private mortgage lender at higher interest rates
    • You do not wish to use private mortgage lender at higher interest rates

    •     You want to get into homeownership and stop paying rent before the rates go   up               

    .      Don’t have enough savings for the usual minimum 5% down payment

     .    You do not wish to use your RRSP  towards your down payment

    .     You are planning on staying in your new home for at least the next 5 years

    .     You are 1st time home buyer

    .     2 years on the same job with credit score of min 650

    .     You do not have maxed out  credit


    Cash Back Mortgages for Closing Costs

    If you have some money for a down payment but want a smaller amount to cover other expenses, then a smaller cash back mortgage is possibility for you.  You receive anywhere between 1% and 3% cash back on the mortgage to help with the closing costs, furniture and even paying off some other debts.


    Flex Down or Borrowed Down Payment

    This is slightly different from a cash back in that you can borrow your down payment from a line of credit, credit card or personal loan.  You may even  be able to use a gifted down payment from immediate family members provided that you have good credit and stable income.

    With over  20 years experience I can introduce you the most professional and experienced  mortgage professional and if of interest private lending options.

    Stop paying your landlord and take action today and start building equity in Byron, Oakridge, Masonville, East London, Westmount, Whitehills,Whiteoaks,Hyde Park,Komoka, Kilworth, South London, Old South,Old North

    .


  • 2 Story For Sale in Meadows of Komoka

    _IGP8159
    Renowned 3 rd Generation Builder

    • 3 bath, 4 bdrm 2 story - $405,000 CAD - Best Price

     -  Awe inspiring and impeccable ,Custom built Condon Homes executive 4 bedroom home. Centre hall plan with inviting hardwood surfaced foyer leading to main floor dining room with hardwood flooring ,kitchen with ceramic flooring, beautiful granite countertops ,eat in area with patio doors to covered rear porch to secluded ,privacy fenced rear yard complete with newly planted spruce trees. Family room with hardwood flooring and floor to ceiling fireplace open to eating area and kitchen. Main floor mudroom and laundry. Master bedroom 17 x 11 ft, walk in closet 5`- 6` x 11`Ensuite with amazing glass shower /whirlpool tub his/her vanities 12`- 0` x 11`- 0`Garage 25`- 9` wide x 21`- 6` long with extended bay 29`deep. Stairs to basement from garage. Upgraded trim package, pot lights, central air, privacy fencing and some landscaping included on a 65 foot wide lot. Concrete driveway at a small additional price.
    What else could you ask for in a new home?
    Call today to get builder direct pricing!

    Property information

  • Largest Private U.S. Residence to be Offered at No-Reserve Auction

    Supreme Auctions announces the no-reserve, absolute auction of Serenity Ridge, set for Sept. 27. This magnificent estate is in Douglas County, Parker Colorado. The county and city have both been consistently featured in CNN Money, CNBC, Huffington Post, Money, Forbes, and Fortune as one of the most affluent areas in the country due to the A-list residents, including celebrities, athletes, and business executives. Previously listed for $22 million, the property is being offered fully furnished and will sell to the highest bidder iThis will be the largest privately owned home to be sold through a no-reserve auction.

    The residence itself, which spans more than 50,000 square feet of indoor and outdoor living space, encompasses 11 en-suite bedrooms throughout the home with two connecting apartments. The master wing is a haven unto its own with its full study, kitchenette, library, and one of the home’s two conference rooms. Automobile aficionados will appreciate the abundance of garage space to house a dozen or more vehicles. An additional auto barn with its elevated ceiling will accommodate the most discerning collection, and the above living quarters are perfect for staff when the entertaining bug bites.

    Located on 70 serene acres close to all that Metropolitan Denver area has to offer, this estate is secluded enough to welcome the most private of residents,” said Maverick Commins, president of Supreme Auctions. “This luxury getaway is perfect for celebrities and CEOs who want to escape and get away from it all. Words don’t do this property justice; even pictures and video pale in comparison to immersing yourself in the ambiance of this private sanctuary, one where you can feel totally at peace yet entertain on multiple levels when the occasion arises.”

    Acres of solitude offer unobstructed, panoramic views of the Colorado Front Range Peaks and Rocky Mountains. Two ponds for fishing, a restful cascading waterfall, numerous patios, and fresh breezes await the outdoor enthusiast. Serenity Ridge is surrounded by a multitude of activities including stunning hiking trails, mountain biking, horseback riding, cross-country skiing, and rivers for rafting and kayaking.

    “This is literally a one-of-a-kind house. When I saw the property, I fell in love with it, and every time I’m here, I leave feeling rejuvenated,” said the owner. “We wanted to give personality and hominess to this grand property, and adding the porches was important because it is an indoor / outdoor family residence that is friendly and fun!”

    Residents and guests alike will want to soak up all of the offerings at Serenity Ridge. With four kitchens, entertaining is a breeze, and the indoor pool with locker room, steam, and sauna provide year-round exercise and relaxation. The property is perfect for corporate retreats, complete with a conference-room facility and a complete floor devoted to entertainment, including a home theatre, two-lane bowling alley, arcade game room, performance stage, billiard table, and four-star, restaurant-quality, full-service bar.

    Parker, Colo., provides one of the sunniest climates in the U.S. and a wonderful sense of community with a deep respect for privacy, making this the perfect home for a busy professional who needs to jet away at a moment’s notice yet longs for a private retreat from the outside world. The residence is within a short 20-minute drive of Centennial Airport, servicing private business and vacation travel.

    “This property provides an exceptional opportunity for the discriminating luxury buyer,The finishes and attention to detail are apparent at every turn with stunning artwork, rich materials, and high-end systems. This grand home is comfortable and intimate both with its scale and the well-designed floor plan that provides ample space for family gatherings and entertaining.

    This stunning retreat will be offered at a no-reserve auction on Sept. 27, 2014.We certainly don't see properties of this magnitude and luxury  in the London Ontario market or anywhere in Middlesex, although we do have a number of very distinctive estates . If you looking for  country estates, higher end horse farms, or homes of distinction both rural and urban ….. I can help you find  distinctive and unique properties not necessarily on  the M LS real state system .

    Anyone wishing to view this property or put a bid in I would be more than happy to accommodate you . 

    Jim Straughan

     broker of record 

    AROS Realty LTD


    Article courtesy of unique homes  magazine

  • Price Reduced on 193 Huron Street in Old North

    Old North, London  -  Announcing a price reduction on 193 Huron Street, a 4 bdrm single story. Now MLS® $299,000 CAD - competitively priced.

    Property information

  • What Influences Your Home’s Market Value?

    There are  many factors both major and minor that may either positively or negatively affect the market value of your home. There are traditional factors that cannot really be controlled and there are the non-traditional ones that can be unintended, unexplainable, unforeseen, or unwanted. Let’s call them “the six U’s,” the six him U’s are undoubtedly the more difficult to fix and in some cases impossible to prepare for causing a significant devaluation of a home.

    Traditional Factors
    1. Location: This is pretty self-explanatory. Distance to and from schools, major highways, hospitals, train stations, airports, and public recreation areas are primary indicators of price. In some local cases proximity to certain areas of interest can affect the value of a home by more than half. Whether it be a level of prestige and social stigma attached to residence in a higher-end area or perhaps the opposite.

    2. Local Market Demand: Local markets have aspects that make them more appealing. Tax codes (for example low taxs in Komoka Ont v.s London Ontario are seen a a plus), weather, quality of school districts, crime rates, and quality of life metrics come into play when measuring local market demand.

    3. The Economy: Buyer confidence cannot be underestimated, and faith in the economy can go a long way in the valuation. One must look no further than the 2007 US housing market collapse. In some volatile areas property rates plummeted more than 50 %. When people lose faith in the national economy and the long term potential of job security they will be much less likely to take out a mortgage.

    4. The Home Itself: Almost all homes will appreciate in value if they meet the following criteria: at least two bedrooms, one full-size bathroom, a living room, a garage, and utility room. That being said, depending on market location there are literally thousands of location specific aspects to assess a home’s property value. For instance, which year the home was built, the name of the builders, the type of materials used, etc.

    5. The Lot: Once you check the actual numbers, jump on the internet and use Google Earth to check out a bird’s eye view to give you an idea of how close the house is to the street, how much space separating you to your neighbor, how much yard do you actually have room to work with, and will you have privacy from your neighbors? These are all valid question that must be asked.

    The Six U’s
    1. Unintended: The presence or merely threat of fracking can send your property value plunging by more than 24 percent. All it takes is for one neighbor or landowner to sell and the rest of the dominos will fall in place. Once fracking has taken place, it becomes imperative to vacate the area, as drinking water usually becomes contaminated with chemicals used in the process. If the threat becomes real, expect to see plenty of moving trucks waiting to move your fleeting neighbors.

    2. Unique: Differentiation is a key, having unique features can be an advantage and escalate the value of your home. Maybe your home was grandfathered in and is exempt to certain newly mandated building codes. This could be seen as an asset. Or perhaps your area was deemed high risk for sinkholes after the purchase. Now your property value, despite prime location has tumbled.

    3. Unexplainable: If a few of your neighbors sell their homes well below market value for reasons unknown, it could decrease the market value of your home. This is only compounded when people begin to speculate as to why the value was so low and may drive away potential buyers. In addition, the problem becomes exacerbated when there are fewer neighbors to hold the credibility of the neighborhood.

    4. Unforeseen: The presence, or over presence of rental properties in your neighborhood can drop values by up to 15 percent. As a homeowner you would not be ecstatic about having a bunch of rentals as those tenants are not responsible for the upkeep and more importantly curb appeal. The overabundance of rental properties can be a good sign that the economy is not where it needs to be for home ownership.

    5. Unwanted: Bad neighbors are a pain, and unless you live in a home owners association there is no easy course of action you can take to remove the person and/or their junk from your sight. The presence of nearby hoarders can send your property plummeting . Instead of just watching a neighbor send the value of your house plummeting, try to get them to help or even offer to pay for a clean up which will undoubtedly be cheaper than the alternative.

    6.  Unlucky:  random convergence  of events  both micro and macro that can't easily be identified.. in other words what we call  bad luck, bad karma  whatever phrase you like to use when the universe  is being unkind you.

  • What 1 million buys you in Toronto real estate market.

     

    MLS# C2777777
    37 Dalton Rd  Sold:$1,037,000  
    Toronto, Ontario M5R2Y8  Toronto  C02  AnnexList:$1,025,000  
    Orig Price:$1,025,000Taxes:$5,943.75/2013101 % List
    SPIS:N  Annex  115-18-QDOM:3Contract:11/4/2013Sold:11/7/2013
    Semi-DetachedFronting On:ERooms:10
    3-StoreyAcreage: Bedrooms:4
    Dir/Cross St:Spadina / BloorWashrooms:3
    Lot:27.5X77.92 Feet1x4, 1x4, 1x4
    Lot Irreg: 
    MLS#:C2777777 PIN#: 
    Kitchens:3
    Fam Rm:Y
    Basement:Unfinished
     
    Fireplace/Stv:Y
    Heat:Gas
    Water
    A/C:NoneCentral Vac: 
    Apx Age: 
    Apx Sqft: 
    Assessment: 
     
    Elevator: Laundry Lev: 
    Phys Hdcap-Equip: 
    Exterior:Brick
     
    Drive:None
    GarType/Spaces:None/0
    Parking Spaces:0
    UFFI: 
    Pool:None
    Zoning: 
    Cable TV: Hydro: 
    Gas: Phone: 
    Water:Municipal
    Water Supply: 
    Sewers:Sewers
    Spec Desig:Unknown 
    Farm/Agr: 
    Waterfront: 
    Retirement: 
     
     
    #RoomLevelDimensions (ft)    
    1LivingMain23.85x13.02LaminateBay WindowFireplace
    2DiningMain13.58x11.06Laminate  
    3KitchenMain10.76x6.17   
    4BrMain13.35x11.88Laminate  
    5Living2nd30.61x11.55LaminateBay WindowFireplace
    6Kitchen2nd6.79x6.27   
    7Br2nd11.32x12.47Laminate  
    82nd Br2nd11.55x9.68Laminate  
    9Living3rd12.04x8.56Laminate  
    10Br3rd15.94x16.47

     

     

     Seriously aren't you glad you're not trying to buy home in  Toronto or the GTA? 

     We have it good in terms of local real estate  good old London Ontario. 

       Comparing local markets it would seem our prices have lots of atmosphere to them. 

  • Mortgage Check List

     Today I was showing a young couple some condominiums and houses in the Byron area of London Ontario. Not only would this be their first home but today was the first time they ever went out looking at houses, it was rewarding and refreshing to work with  young people who  are so enthusiastic and excited about their future, they are planning to be married in April 2014 .

     To their credit  they took a referral from family members and were preapproved by mortgage professional so they knew what price range they could afford and were comfortable with.  Apparently they had been told this mortgage guy was the best mortgage representative in Ontario .. Wow. Although the rate he  quoted them was certainly competitive  and they knew what range they were call for qualified for , there were numerous  considerations they  hadn't been informed of, or options considered and explained . Really, it's all about taking the time with prospective clients and clients to go over the little details as well as the big stuff. I find most mortgage professionals especially the younger ones are pushing the  variable rates and  yes for some people  this may be the best option. But what I find is lacking is a full disclosure or elaboration of the advantages of todays  historically  low  fixed rates. In other words explaining the pros and cons of both sides of the  varable rate versus fixed rate  argument . Perhaps is not so much which is better but rather which one is appropriate for the individual client. I may have a bias towards single detached homes versus condominiums, however that shouldn't cause me to be blind to the fact that for some condominiums are the better option and as a professional I should be aware of the pros and cons of both options as they may relate to my client. 

     So with the above in mind I would like to present the following mortgage checklist which  was emailed to me by mortgage professional to share with my clients. It is not by means an exhaustive list but it is rather comprehensive and hopefully thought-provoking and useful.

     if you would like to discuss how any of the following may affect your individual situation by all means let's  talk.

    Mortgage Checklist


    The Rate


    1. ____ Is the rate you’re quoting me the lowest I can possibly get, given my

    qualifications and mortgage preferences?

    2. ____ If I find a lower rate for a similar product elsewhere, will you match it?

    3. ____ How many other lenders did you check when shopping around my mortgage?

    Which major banks and credit unions did you not check?

    • These questions apply to brokers because bankers and credit union reps

    generally don’t shop around for you.

    4. ____ How long will the lender hold my rate, once I apply?

    • The best rates often come with only 30-45 day rate hold periods (aka.

    “quick close rates”).

    5. ____ If I get approved and rates drop, how will I know? Will the lender automatically

    adjust my rate lower? Will I get the lender’s very best promotional rates if its rates

    fall?

    6. ____ Can I get a pre-approval at this rate?

    • Pre-approvals often come with rate premiums.

    7. ____ Do you offer fully discounted rates up front at renewal? Or do you send me an

    inflated rate in a renewal letter and hope I sign it?


    Extra Payments


    8. ____ How much extra can I prepay each year without penalty?

    • Standard “closed” mortgages offer annual “lump-sum” prepayment

    options ranging from 10-30% of the original mortgage amount.

    • Don’t pay for more prepayments than you need (only 18% of Canadians

    use them). But, just as importantly, don’t underestimate the prepayment

    options you’ll need. Prepayment flexibility can help you reduce a

    mortgage penalty, or it can save you interest in the event of a cash

    windfall.

    9. ____ When can I make these prepayments?

    • The best lenders allow you to make prepayments any time during the

    year, in multiple installments.

    10. ____ How much can I increase my ongoing payments each year?

    • Most mortgages let you increase your ongoing payments by 15-20% each

    year. Some go up to 100% and/or offer double-up payments.

    11. ____ What payment frequencies do you have?

    • Examples include monthly, bi-weekly, weekly, and semi-monthly.

    Accelerated payments (like “accelerated bi-weekly”) are the equivalent of

    making one extra monthly payment per year. RBC Mortgage Specialist

    Jennifer Bissonnette notes, “A 25 year amortization can be reduced to 22

    years simply choosing accelerated bi-weekly payments instead of

    monthly.” Being mortgage-free three years sooner will cost you just $59

    more every two weeks, she adds. That’s on a $300,000 mortgage at

    3.69% with a 25-year amortization.



    Penalties


    12. ____ Can I break my mortgage any time I want?

    • Most lenders let you pay a penalty and get out of a closed mortgage

    early. Some no-frills lenders only let you out if you sell your property.

    Some don’t let you discharge your mortgage at all, until the term is up.

    • You’ll almost always pay a rate premium for an “open” mortgage with no

    penalties. If you plan to keep the mortgage for more than six months,

    you’re often better off choosing a lower rate and paying the penalty to get

    out early (if needed).

    13. ____ If a mortgage penalty applies, how do you calculate it?

    • Fixed rate penalties are usually three months of interest or the interest

    rate differential (IRD), whichever is more. Variable-rate penalties are

    typically 3-months of interest based on your current rate.

    • Penalty calculations based on posted rates (i.e. rates higher the rate you

    actually pay) can sometimes be several thousand dollars more

    expensive. This method is common at most large banks, and is their

    single greatest weakness. 

    • Some lenders get tricky. For example, instead of a standard 3-month

    interest penalty based on your current rate, some lenders charge 3-month

    interest penalties based on posted rates. Others charge interest rate

    differential penalties when 3-month interest charges normally apply. A few

    even ding you with 12-month interest penalties or penalties equal to 3%

    of your balance. Avoid such mortgages unless the rate savings is

    significant.

    14. ____ Can I port my mortgage to a new property to avoid penalties?

    • Don’t underestimate your odds of moving. Look for good porting flexibility,

    especially if you’re young, need job mobility and/or have a growing family.

    • Some lenders let you port, but not increase. That forces you to pay a

    penalty if you buy a pricier house and need more financing.

    • Note that credit unions typically prevent porting across provincial lines—a

    problem if you move out of province.

    • If you have a line of credit attached to your mortgage, make sure you can

    easily port it as well—and keep your rate.

    15. ____ How long do you give me to port my mortgage?

    • The longer the better. At least 60 days is preferable. Some lenders make

    you close your old property and new property on the same day, which can

    be unrealistic.

    16. ____ Do you deduct interest from my penalty rebate if I port my mortgage and my old

    and new house don’t close on the same day?

    17. ____ If I break the mortgage early, can I use my unused prepayment privileges to

    lower the penalty?

    • Some lenders restrict you from using your prepayment options for this

    purpose, if you do so within 30 days of discharging the mortgage. Some

    lenders, like RBC, automatically apply unused prepayment privileges to

    lower your penalty when refinancing—a cost-saving feature.




    18. ____ If the mortgage includes cash back, how much of that cash do I have to repay if Ibreak the mortgage early?

    • Usually it’s a pro-rated amount but some lenders make you repay 100%

    of the cash back, even if you break the mortgage one day early.

    • Have your mortgage adviser calculate your “effective rate,” including the

    cash back. That tells you how much of a rate premium you’re paying for

    the cash.


    Refinancing


    19. ____ Is there any restriction on when I can refinance?

    20. ____ Can I increase my mortgage at any time, at fully discounted rates, and without

    paying any penalty?

    • This is vital if you need to refinance or buy a more expensive home.
    • Some lenders have a policy of charging penalties, or not giving you the

    best rates when you increase your mortgage.

    21. ____ Can I extend my mortgage term at any time without penalty, and at fully

    discounted rates?

    • This is useful if rates drop and you want to blend your rate with the new

    lower rate (which lowers your payment). It’s also key if you’re past the

    middle of your term and you want to mitigate the risk of higher rates at

    renewal.

    • Beware of lenders that let you “blend and extend” but then bake a

    prepayment charge into your new mortgage rate.

    22. ____ Is your mortgage readvanceable?

    • Readvanceable mortgages let people with at least 20% equity re-borrow

    principal that they’ve previously paid off. This feature usually involves a

    credit line linked to your mortgage. Readvanceables are good low-cost

    sources of funds for investment opportunities, a small business,

    renovations and so on. Readvanceables also let you pre-pay your

    mortgage without the fear of not having cash on hand in an emergency.

    Some people even use them as an alternative to a contingency fund.

    • There are two types of readvanceables: manual (where you must apply to

    reborrow paid-down principal) or automatic (where every principal

    payment is instantly available to you if you need it).

    23. ____ Can I roll in my refinance or switch costs to the new mortgage?


    Variable-rate Mortgages


    24. ____ Does your variable rate mortgage have any restrictions?

    • Some variable-rate mortgages prevent you from porting or blending your

    rate, prevent increases and have fewer prepayment privileges.

    25. ____ Can I fix my payment so that it doesn’t move if rates increase?

    • If so, and rates rise, more of your payment goes to interest. If rates fall,

    less of your payment goes to interest. Note that most fixed payment

    variable mortgages have “trigger rates.” If prime rate increases so much

    that it exceeds the trigger rate, the lender will boost your “fixed payment.”




    26. ____ How fast does the lender increase rates when prime rate rises?

    • Some lenders, like ING, adjust their variable rates every three months,

    which keeps your rate lower longer. (This delay works against you if rates

    drop)

    • A few lenders offer capped-rate variables with a ceiling on how high your

    rate can go. These are usually a bad deal if you do the math.


    27. ____ Can I convert my variable rate to any of the lender’s fixed rates, at any time?

    • Remember, you’ll rarely get the best fixed rate when you convert.

    Moreover, it’s impossible to successfully time interest rates over the long

    run. For those reasons, do not go variable to save money in the short run,

    hoping to lock in “at the right time.” Variables are a long-term strategy.

    28. ____ If I convert my variable rate to a fixed rate, will I get the absolute lowest rate the

    lender offers for that term?

    • Typically you won’t. Lenders know you’d have to break your mortgage

    and pay a penalty. Most use that as leverage to offer merely average

    rates on conversions.


    Other Features


    29. ____ Can I split the mortgage into different parts?

    • “Hybrid mortgages,” as they’re called, let you lock part of your mortgage

    into a fixed rate, or various fixed rate components, while the other parts

    may float at a variable rate. The purpose is to diversify your rate risk.

    • If you pick a mortgage with both long and short terms, remember that the

    lender may not offer you the best rates on the renewal of your shorter

    term. It knows you’d have to pay a penalty to get out of your longer term,

    making you less rate sensitive.

    30. ____ Can you offer the amortization I want?

    • Some lenders have minimum amortizations (like 18 years) while a handful

    of others still offer amortizations up to 35 years (assuming you have 20%-

    plus equity).

    31. ____ Does the lender let me check my balance and remaining amortization online?

    Make prepayments online?

    • Major banks and large non-bank lenders (like First National, Street

    Capital and the big credit unions) usually have the best online access.

    32. ____ Is the lender a bank or credit union with branches?

    • Nowadays you can fully service your mortgage online or by phone, but

    some people still like a branch presence.

    • Almost all lenders link to your chequing account to automatically withdraw

    mortgage payments and make prepayments. So it’s no longer

    inconvenient to separate your mortgage and banking.

    • There are over 300 mortgage lenders in Canada. Don’t fear small lenders

    that you’ve never heard of.

    33. ____ Do you offer early renewals at your best discounted rates with no fees or

    penalties?

    • A 120-180 day early renewal can potentially reduce your rate risk. But

    beware of lenders that try to create false urgency and lock you into a

    “limited time” offer well before your renewal date.


    34. ____ Do you offer an all-in-one style mortgage where I can combine chequing, savings

    and my mortgage into one account?

    • Doing this can save interest as your spare cash lowers your mortgage

    balance, thus reducing the amount used to calculate your interest.

    35. ____ If I sell my house, can the buyer assume my mortgage?

    36. ____ If I get a 1-year fixed, can it be converted to any of the lender’s fixed rates, at any

    time?

    • Only a handful of lenders offer this option, which gives you variable-rate

    type features without committing to a long term.

    37. ____ Can I skip a payment if needed? If so, how often and under what circumstances?

    • “Payment vacations” can be handy in emergencies. But some lenders

    require that you make an equivalent pre-payment first. Remember that

    skipped payments aren’t free. You still have to make all payments

    eventually, and interest accrues in the meantime.

    38. ____ Do you pay profit sharing on my mortgage

    • Available only at credit unions who rebate a small portion of your interest

    paid. You can access these funds only after a vesting period, which can

    last 3-7 years or more.

    39. ____ What default insurer will insure my mortgage?

    • Default insurance generally applies if you have less than 20% equity.

    When you switch lenders with an insured mortgage, you must ensure that

    the new lender accepts that insurer’s mortgages. CMHC and Genworth

    allow you the most flexibility when switching lenders.

    40. ____ If I purchase creditor life insurance through you, can I port that insurance to a

    new lender without having to requalify and lose the premium I’m paying on my

    current mortgage amount?

    • Insurance premiums go up as you age, so you want insurance that’s not

    tied to one lender. That way, you can keep your premiums as-is on your

    original mortgage amount, even if you change lenders.

    • If you don’t have portable creditor life insurance and get sick, your preexisting

    condition may not be covered by the new lender’s insurer.


    Extra Costs


    41. ____ Will you pay my appraisal fee?

    • Appraisal fees are usually $225-$325, but can be significantly more

    based on location and property-type. There is usually no appraisal cost if

    your mortgage is insured.

    42. ____ Do you have any processing fees?

    43. ____ Do you have any cancellation fees?

    44. ____ How is the mortgage compounded?

    • Semi-annual compounding costs you less than monthly compounding.

    45. ____ Do you charge “reinvestment fees” on top of the penalty if I break my mortgage

    early?

    46. ____ Do I have to pay legal (aka. mortgage registration) fees?

    • Most lenders cover this cost on switches where the loan amount, loan-tovalue

    And amortization are not increasing.

    • A few even pay legal fees on refinances, but the rate is often higher than

    you can get elsewhere.


    47. ____ Is the mortgage a “collateral charge” mortgage?

    • Collateral charges help you avoid paying legal fees to refinance with your

    lender. But they also make it potentially more expensive to switch

    institutions at maturity. The reason: most lenders only pay switch fees on

    “standard charges,” not collateral charges.

    • Some collateral charge lenders register your mortgage for 100-125% of

    your property value. That lets you borrow more if your property value

    rises. The tradeoff: It prevents you from securing anything else against

    your property, like a second mortgage.


    48. ____ If I switch my mortgage to you, will you pay my old lender’s discharge fee?

    • Very few lenders do this, but it can’t hurt to ask.

    49. ____ Do I have to pay title insurance if I switch my mortgage to you?

    • The answer is commonly yes, but some lenders don’t require title

    insurance, or they will pay it for you. It can be $150-$300 or more.

    50. ____ Will I pay a higher rate if I’m self-employed and cannot prove my income in the

    traditional manner?

    51. ____ Does the mortgage come with free banking or significant discounts on other

    financial products?

    • Unlike days gone by, you no longer need to bundle financial products to

    get the market’s best mortgage rates. Nor do you need a “special

    relationship” with your banker. Simply shopping around and negotiating

    will get you the same mortgage discounts 99% of the time.

    52. ____ If I switch lenders and have a mortgage and line of credit, will the lender charge

    me a separate discharge fee on both the mortgage and line of credit?

    53. ____ If I need bridge financing to cover the gap between the purchase of my new

    home and the sale of my old home, what rate and fees will you charge?

    • Also ask how long the bridge lasts. 30 days is typical.

    54. ____ Will I pay an extra fee if I break my open mortgage within 12 months?


    Service


    55. ____ If I have a problem with my mortgage, who do I call?

    • Large mortgage providers like banks often have live chat or 24-hour

    telephone support, all tracked and recorded in case you have a problem

    later.

    • Large lenders also have systems that enable multiple agents to work on

    your file. This yields faster service if your main contact is unavailable.

    56. ____ Will I get a dedicated mortgage advisor, or talk to someone different each time I

    have a mortgage question?

    • You should always have the email address and direct number of your

    primary mortgage contact.

    57. ____ How long do I have to wait on hold to speak to my mortgage advisor? What are

    his/her hours?

    58. ____ Will my mortgage advisor contact me annually for a mortgage check-up?

    • This service ensures that your rate is still competitive and that your

    mortgage type still makes sense for your changing needs.




    Advice


    59. ____ What are your qualifications as a mortgage advisor?

    • How long have you been a mortgage advisor? (The more experience, the

    less chance for costly mistakes. Look for two years minimum experience.)

    • Do you specialize in mortgages or are you a generalist who sells many

    financial products but is a master of none?

    • Have you closed over $10 million of financing in the last 12 months?

    (That’s a minimum rule of thumb for professional mortgage advisors.)

    60. ____ Given my lifestyle and savings, will you be honest with me about whether I can

    truly afford this mortgage?

    • Just because a lender approves you doesn’t mean you can safely afford

    the payments. Moreover, alternative down payment options may not be

    worth the trade-offs.

    61. ____ What methods will you use to help me pick the right term?

    • Proper term selection saves you way more than small rate differences,

    almost every time. Find an advisor that does more than glibly quote

    industry research or ask if you can “sleep at night” with a variable rate. At

    a minimum, your advisor should compare the estimated interest cost of

    various terms, given sample rate increases over the next five years.

    62. ____ Will you help me stress test my mortgage?

    • Be sure you can afford your mortgage if rates jump 2-3%.

    63. ____ What mortgage strategies will you provide to help me retire faster?

    • Your mortgage can be used as a key financial planning tool to accelerate

    your savings, create future equity and build your investment portfolio.



     

    Note: This checklist assumes you’re a qualified borrower who’s getting a mortgage on his/her primary residence, with provable income and decent credit. If this doesn’t reflect your scenario, other important questions will applyThe Ultimate Mortgage Checklist


    The Rate


    1. ____ Is the rate you’re quoting me the lowest I can possibly get, given my

    qualifications and mortgage preferences?

    2. ____ If I find a lower rate for a similar product elsewhere, will you match it?

    3. ____ How many other lenders did you check when shopping around my mortgage?

    Which major banks and credit unions did you not check?

    • These questions apply to brokers because bankers and credit union reps

    generally don’t shop around for you.

    4. ____ How long will the lender hold my rate, once I apply?

    • The best rates often come with only 30-45 day rate hold periods (aka.

    “quick close rates”).

    5. ____ If I get approved and rates drop, how will I know? Will the lender automatically

    adjust my rate lower? Will I get the lender’s very best promotional rates if its rates

    fall?

    6. ____ Can I get a pre-approval at this rate?

    • Pre-approvals often come with rate premiums.

    7. ____ Do you offer fully discounted rates up front at renewal? Or do you send me an

    inflated rate in a renewal letter and hope I sign it?


    Extra Payments


    8. ____ How much extra can I prepay each year without penalty?

    • Standard “closed” mortgages offer annual “lump-sum” prepayment

    options ranging from 10-30% of the original mortgage amount.

    • Don’t pay for more prepayments than you need (only 18% of Canadians

    use them). But, just as importantly, don’t underestimate the prepayment

    options you’ll need. Prepayment flexibility can help you reduce a

    mortgage penalty, or it can save you interest in the event of a cash

    windfall.

    9. ____ When can I make these prepayments?

    • The best lenders allow you to make prepayments any time during the

    year, in multiple installments.

    10. ____ How much can I increase my ongoing payments each year?

    • Most mortgages let you increase your ongoing payments by 15-20% each

    year. Some go up to 100% and/or offer double-up payments.

    11. ____ What payment frequencies do you have?

    • Examples include monthly, bi-weekly, weekly, and semi-monthly.

    Accelerated payments (like “accelerated bi-weekly”) are the equivalent of

    making one extra monthly payment per year. RBC Mortgage Specialist

    Jennifer Bissonnette notes, “A 25 year amortization can be reduced to 22

    years simply choosing accelerated bi-weekly payments instead of

    monthly.” Being mortgage-free three years sooner will cost you just $59

    more every two weeks, she adds. That’s on a $300,000 mortgage at

    3.69% with a 25-year amortization.



    Penalties


    12. ____ Can I break my mortgage any time I want?

    • Most lenders let you pay a penalty and get out of a closed mortgage

    early. Some no-frills lenders only let you out if you sell your property.

    Some don’t let you discharge your mortgage at all, until the term is up.

    • You’ll almost always pay a rate premium for an “open” mortgage with no

    penalties. If you plan to keep the mortgage for more than six months,

    you’re often better off choosing a lower rate and paying the penalty to get

    out early (if needed).

    13. ____ If a mortgage penalty applies, how do you calculate it?

    • Fixed rate penalties are usually three months of interest or the interest

    rate differential (IRD), whichever is more. Variable-rate penalties are

    typically 3-months of interest based on your current rate.

    • Penalty calculations based on posted rates (i.e. rates higher the rate you

    actually pay) can sometimes be several thousand dollars more

    expensive. This method is common at most large banks, and is their

    single greatest weakness. 

    • Some lenders get tricky. For example, instead of a standard 3-month

    interest penalty based on your current rate, some lenders charge 3-month

    interest penalties based on posted rates. Others charge interest rate

    differential penalties when 3-month interest charges normally apply. A few

    even ding you with 12-month interest penalties or penalties equal to 3%

    of your balance. Avoid such mortgages unless the rate savings is

    significant.

    14. ____ Can I port my mortgage to a new property to avoid penalties?

    • Don’t underestimate your odds of moving. Look for good porting flexibility,

    especially if you’re young, need job mobility and/or have a growing family.

    • Some lenders let you port, but not increase. That forces you to pay a

    penalty if you buy a pricier house and need more financing.

    • Note that credit unions typically prevent porting across provincial lines—a

    problem if you move out of province.

    • If you have a line of credit attached to your mortgage, make sure you can

    easily port it as well—and keep your rate.

    15. ____ How long do you give me to port my mortgage?

    • The longer the better. At least 60 days is preferable. Some lenders make

    you close your old property and new property on the same day, which can

    be unrealistic.

    16. ____ Do you deduct interest from my penalty rebate if I port my mortgage and my old

    and new house don’t close on the same day?

    17. ____ If I break the mortgage early, can I use my unused prepayment privileges to

    lower the penalty?

    • Some lenders restrict you from using your prepayment options for this

    purpose, if you do so within 30 days of discharging the mortgage. Some

    lenders, like RBC, automatically apply unused prepayment privileges to

    lower your penalty when refinancing—a cost-saving feature.




    18. ____ If the mortgage includes cash back, how much of that cash do I have to repay if Ibreak the mortgage early?

    • Usually it’s a pro-rated amount but some lenders make you repay 100%

    of the cash back, even if you break the mortgage one day early.

    • Have your mortgage adviser calculate your “effective rate,” including the

    cash back. That tells you how much of a rate premium you’re paying for

    the cash.


    Refinancing


    19. ____ Is there any restriction on when I can refinance?

    20. ____ Can I increase my mortgage at any time, at fully discounted rates, and without

    paying any penalty?

    • This is vital if you need to refinance or buy a more expensive home.
    • Some lenders have a policy of charging penalties, or not giving you the

    best rates when you increase your mortgage.

    21. ____ Can I extend my mortgage term at any time without penalty, and at fully

    discounted rates?

    • This is useful if rates drop and you want to blend your rate with the new

    lower rate (which lowers your payment). It’s also key if you’re past the

    middle of your term and you want to mitigate the risk of higher rates at

    renewal.

    • Beware of lenders that let you “blend and extend” but then bake a

    prepayment charge into your new mortgage rate.

    22. ____ Is your mortgage readvanceable?

    • Readvanceable mortgages let people with at least 20% equity re-borrow

    principal that they’ve previously paid off. This feature usually involves a

    credit line linked to your mortgage. Readvanceables are good low-cost

    sources of funds for investment opportunities, a small business,

    renovations and so on. Readvanceables also let you pre-pay your

    mortgage without the fear of not having cash on hand in an emergency.

    Some people even use them as an alternative to a contingency fund.

    • There are two types of readvanceables: manual (where you must apply to

    reborrow paid-down principal) or automatic (where every principal

    payment is instantly available to you if you need it).

    23. ____ Can I roll in my refinance or switch costs to the new mortgage?


    Variable-rate Mortgages


    24. ____ Does your variable rate mortgage have any restrictions?

    • Some variable-rate mortgages prevent you from porting or blending your

    rate, prevent increases and have fewer prepayment privileges.

    25. ____ Can I fix my payment so that it doesn’t move if rates increase?

    • If so, and rates rise, more of your payment goes to interest. If rates fall,

    less of your payment goes to interest. Note that most fixed payment

    variable mortgages have “trigger rates.” If prime rate increases so much

    that it exceeds the trigger rate, the lender will boost your “fixed payment.”




    26. ____ How fast does the lender increase rates when prime rate rises?

    • Some lenders, like ING, adjust their variable rates every three months,

    which keeps your rate lower longer. (This delay works against you if rates

    drop)

    • A few lenders offer capped-rate variables with a ceiling on how high your

    rate can go. These are usually a bad deal if you do the math.


    27. ____ Can I convert my variable rate to any of the lender’s fixed rates, at any time?

    • Remember, you’ll rarely get the best fixed rate when you convert.

    Moreover, it’s impossible to successfully time interest rates over the long

    run. For those reasons, do not go variable to save money in the short run,

    hoping to lock in “at the right time.” Variables are a long-term strategy.

    28. ____ If I convert my variable rate to a fixed rate, will I get the absolute lowest rate the

    lender offers for that term?

    • Typically you won’t. Lenders know you’d have to break your mortgage

    and pay a penalty. Most use that as leverage to offer merely average

    rates on conversions.


    Other Features


    29. ____ Can I split the mortgage into different parts?

    • “Hybrid mortgages,” as they’re called, let you lock part of your mortgage

    into a fixed rate, or various fixed rate components, while the other parts

    may float at a variable rate. The purpose is to diversify your rate risk.

    • If you pick a mortgage with both long and short terms, remember that the

    lender may not offer you the best rates on the renewal of your shorter

    term. It knows you’d have to pay a penalty to get out of your longer term,

    making you less rate sensitive.

    30. ____ Can you offer the amortization I want?

    • Some lenders have minimum amortizations (like 18 years) while a handful

    of others still offer amortizations up to 35 years (assuming you have 20%-

    plus equity).

    31. ____ Does the lender let me check my balance and remaining amortization online?

    Make prepayments online?

    • Major banks and large non-bank lenders (like First National, Street

    Capital and the big credit unions) usually have the best online access.

    32. ____ Is the lender a bank or credit union with branches?

    • Nowadays you can fully service your mortgage online or by phone, but

    some people still like a branch presence.

    • Almost all lenders link to your chequing account to automatically withdraw

    mortgage payments and make prepayments. So it’s no longer

    inconvenient to separate your mortgage and banking.

    • There are over 300 mortgage lenders in Canada. Don’t fear small lenders

    that you’ve never heard of.

    33. ____ Do you offer early renewals at your best discounted rates with no fees or

    penalties?

    • A 120-180 day early renewal can potentially reduce your rate risk. But

    beware of lenders that try to create false urgency and lock you into a

    “limited time” offer well before your renewal date.


    34. ____ Do you offer an all-in-one style mortgage where I can combine chequing, savings

    and my mortgage into one account?

    • Doing this can save interest as your spare cash lowers your mortgage

    balance, thus reducing the amount used to calculate your interest.

    35. ____ If I sell my house, can the buyer assume my mortgage?

    36. ____ If I get a 1-year fixed, can it be converted to any of the lender’s fixed rates, at any

    time?

    • Only a handful of lenders offer this option, which gives you variable-rate

    type features without committing to a long term.

    37. ____ Can I skip a payment if needed? If so, how often and under what circumstances?

    • “Payment vacations” can be handy in emergencies. But some lenders

    require that you make an equivalent pre-payment first. Remember that

    skipped payments aren’t free. You still have to make all payments

    eventually, and interest accrues in the meantime.

    38. ____ Do you pay profit sharing on my mortgage

    • Available only at credit unions who rebate a small portion of your interest

    paid. You can access these funds only after a vesting period, which can

    last 3-7 years or more.

    39. ____ What default insurer will insure my mortgage?

    • Default insurance generally applies if you have less than 20% equity.

    When you switch lenders with an insured mortgage, you must ensure that

    the new lender accepts that insurer’s mortgages. CMHC and Genworth

    allow you the most flexibility when switching lenders.

    40. ____ If I purchase creditor life insurance through you, can I port that insurance to a

    new lender without having to requalify and lose the premium I’m paying on my

    current mortgage amount?

    • Insurance premiums go up as you age, so you want insurance that’s not

    tied to one lender. That way, you can keep your premiums as-is on your

    original mortgage amount, even if you change lenders.

    • If you don’t have portable creditor life insurance and get sick, your preexisting

    condition may not be covered by the new lender’s insurer.


    Extra Costs


    41. ____ Will you pay my appraisal fee?

    • Appraisal fees are usually $225-$325, but can be significantly more

    based on location and property-type. There is usually no appraisal cost if

    your mortgage is insured.

    42. ____ Do you have any processing fees?

    43. ____ Do you have any cancellation fees?

    44. ____ How is the mortgage compounded?

    • Semi-annual compounding costs you less than monthly compounding.

    45. ____ Do you charge “reinvestment fees” on top of the penalty if I break my mortgage

    early?

    46. ____ Do I have to pay legal (aka. mortgage registration) fees?

    • Most lenders cover this cost on switches where the loan amount, loan-tovalue

    And amortization are not increasing.

    • A few even pay legal fees on refinances, but the rate is often higher than

    you can get elsewhere.


    47. ____ Is the mortgage a “collateral charge” mortgage?

    • Collateral charges help you avoid paying legal fees to refinance with your

    lender. But they also make it potentially more expensive to switch

    institutions at maturity. The reason: most lenders only pay switch fees on

    “standard charges,” not collateral charges.

    • Some collateral charge lenders register your mortgage for 100-125% of

    your property value. That lets you borrow more if your property value

    rises. The tradeoff: It prevents you from securing anything else against

    your property, like a second mortgage.


    48. ____ If I switch my mortgage to you, will you pay my old lender’s discharge fee?

    • Very few lenders do this, but it can’t hurt to ask.

    49. ____ Do I have to pay title insurance if I switch my mortgage to you?

    • The answer is commonly yes, but some lenders don’t require title

    insurance, or they will pay it for you. It can be $150-$300 or more.

    50. ____ Will I pay a higher rate if I’m self-employed and cannot prove my income in the

    traditional manner?

    51. ____ Does the mortgage come with free banking or significant discounts on other

    financial products?

    • Unlike days gone by, you no longer need to bundle financial products to

    get the market’s best mortgage rates. Nor do you need a “special

    relationship” with your banker. Simply shopping around and negotiating

    will get you the same mortgage discounts 99% of the time.

    52. ____ If I switch lenders and have a mortgage and line of credit, will the lender charge

    me a separate discharge fee on both the mortgage and line of credit?

    53. ____ If I need bridge financing to cover the gap between the purchase of my new

    home and the sale of my old home, what rate and fees will you charge?

    • Also ask how long the bridge lasts. 30 days is typical.

    54. ____ Will I pay an extra fee if I break my open mortgage within 12 months?


    Service


    55. ____ If I have a problem with my mortgage, who do I call?

    • Large mortgage providers like banks often have live chat or 24-hour

    telephone support, all tracked and recorded in case you have a problem

    later.

    • Large lenders also have systems that enable multiple agents to work on

    your file. This yields faster service if your main contact is unavailable.

    56. ____ Will I get a dedicated mortgage advisor, or talk to someone different each time I

    have a mortgage question?

    • You should always have the email address and direct number of your

    primary mortgage contact.

    57. ____ How long do I have to wait on hold to speak to my mortgage advisor? What are

    his/her hours?

    58. ____ Will my mortgage advisor contact me annually for a mortgage check-up?

    • This service ensures that your rate is still competitive and that your

    mortgage type still makes sense for your changing needs.




    Advice


    59. ____ What are your qualifications as a mortgage advisor?

    • How long have you been a mortgage advisor? (The more experience, the

    less chance for costly mistakes. Look for two years minimum experience.)

    • Do you specialize in mortgages or are you a generalist who sells many

    financial products but is a master of none?

    • Have you closed over $10 million of financing in the last 12 months?

    (That’s a minimum rule of thumb for professional mortgage advisors.)

    60. ____ Given my lifestyle and savings, will you be honest with me about whether I can

    truly afford this mortgage?

    • Just because a lender approves you doesn’t mean you can safely afford

    the payments. Moreover, alternative down payment options may not be

    worth the trade-offs.

    61. ____ What methods will you use to help me pick the right term?

    • Proper term selection saves you way more than small rate differences,

    almost every time. Find an advisor that does more than glibly quote

    industry research or ask if you can “sleep at night” with a variable rate. At

    a minimum, your advisor should compare the estimated interest cost of

    various terms, given sample rate increases over the next five years.

    62. ____ Will you help me stress test my mortgage?

    • Be sure you can afford your mortgage if rates jump 2-3%.

    63. ____ What mortgage strategies will you provide to help me retire faster?

    • Your mortgage can be used as a key financial planning tool to accelerate

    your savings, create future equity and build your investment portfolio.



    Note: This checklist assumes you’re a qualified borrower who’s getting a mortgage on his/her primary residence, with provable income and decent credit. If this doesn’t reflect your scenario, other important questions will apply.

  • How to keep your home’s purchase price secret

    Want to keep you home’s purchase price a secret ?
    You can do this yourself in Ontario but you’re better off using your lawyer ,in my opinion. If you’re  lawyer is going to charge you extra for this find another lawyer ! In London Ontario, and surrounding Middlesex County including such areas as  Ilderton,Komoka,St Thomas, Kilworth home buyers go through the same procedures unlike Toronto home buyers  who have an extra tax.
      How to keep your home’s purchase price secret  ? You pay
     the land transfer tax in advance or simply instruct your lawyer to do so.
     If you want to do this yourself, you will need  the following.
    1.A cover letter from the lawyer
    2.A copy of the original agreement of purchase and sale
    3.The draft deed to be registered on closing
    4.A copy of the statement of adjustments
    5.Three signed land transfer tax affidavits; and  a certified check payable to the Ministry of finance for the amount of land transfer tax owing

     


    The  good news is that  the land transfer tax rate has not changed since June 1, 1989


    0.5% of the value of the consideration up to and including $55,000,
    1% of the value of the consideration which exceeds $55,000 up to and including $250,000, and
    1.5% of the value of the consideration which exceeds $250,000, and
    2% of the amount by which the value of the consideration exceeds $400,000 for land that contains at least one and not more than two single family residences.
    For more Land Transfer tax information  > (http://www.fin.gov.on.ca/en/tax/ltt/)
    The  friendly Ministry  staff will then provide your lawyer with a special code to be entered on closing, to confirm that the land transfer tax has already been paid.   The Lawyer  I use  for the London real estate market is Lawrence Blokker who suggests that all material be sent three weeks in advance of closing to make sure it is completed in time.   Some people have found that if you go in person to the Ministry office, you may be able to obtain the code that same day.( I would not leave that to chance personally)
     A word of caution, Ministry of finance representatives in London are available by appointment only. You can try calling 1 866 668-8297 or the following address for London Ontario is
    Ministry of Finance

    130 Dufferin Avenue, Suite 400
    London ON  N6A 6G8
     

     

  • Housing Bubble ?

    What bubble? CMHC dismisses fears of a housing market bust
     
    “The Canada Mortgage and Housing Corporation issued its annual report on Tuesday, dismissing fears of a housing bubble in the country.  The CMHC’s conclusion on the state of the current housing market is that “clear evidence of a bubble is lacking”  The report also showed housing starts rose 14% in April. The key lending rate is unchanged at 1% since September 2010 in the longest pause since the 1950’s”  

    Doom and gloom takes a back seat to the numbers ! With the historic free trade agreement with Europe ,the long term future looks even brighter to this writer

     

     

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