Wednesday, August 31, 2011

Canada's Smallest House is on the market

A Realtor friend of mine, Jeanine Boutet, posted this on her page the other day and I fell in love with this little house! It was built in 1912, is 350 square feet and totally adorable! This little gem can be yours for a mere $179,900 (which seems like a steal for Toronto)!

There's even a website dedicated to this little house...

Monday, August 29, 2011

Your Home Purchase: Part 4

The average Canadian homebuyer takes 11 months to plan their purchase, according to CMHC. If you’re thinking about buying in the next year, our four-part series will explain how you should be dividing your time.

Part 4: The Home Search

Now that you’ve been preapproved for a mortgage and know your housing price range, it’s time to start looking!
While a Realtor can definitely help you find that ideal home (at no cost to you, since the seller pays their commission), it’s wise to have a sense of what you’re looking for before heading in.

If you’re worried about the direction of the real estate market in your area, your best bet is to find a home that will suit your needs for the next five years or more, if you can afford it. Sit down and think about what your short-term and long-term priorities are, how many bedrooms you’ll need to grow into, what your ideal area looks like, and whether your lifestyle is best suited to a condo or house. You might also want to take into consideration such things as commute times and proximity to sports teams and other community activities.

If your price point doesn’t allow you to purchase a home that you can grow into, try to find one that will give you the most bang for your buck and the biggest return on your investment. This can mean purchasing in an up-and-coming area, or buying close to soon-to-be-built infrastructure improvements like public transit lines. The old real estate adage, location, location, location, still rings true, so if you can buy the worst house on a nice street it is likely worth the investment. In the same sense, you may want to buy a home that’s a little more expensive but well-located, so that you can rent out the basement for some extra income.

Again, a Realtor is probably the best person to discuss your strategies with. They’ll be able to highlight areas that make sense for you, your budget and your current lifestyle.

Monday, August 22, 2011

Your Home Purchase: Part 3

The average Canadian homebuyer takes 11 months to plan their purchase, according to CMHC. If you’re thinking about buying in the next year, our four-part series will explain how you should be dividing your time.

Part 3: The Budget
So now that you have a preapproval, and you’ve been taking strides to trim down your household spending over the last few months, it’s time to come up with a real budget that will determine the type of house you can afford.
This is usually a number that is significantly lower than the maximum made available to you by your lender (mainly because your lender only takes certain expenses into account, such as heating costs and outstanding debts, when determining this magic number. Others, like food, are completely left out of the equation).
The best way to come up with a realistic price tag is to look at where your money is currently going and work backwards from there to see what’s left over for mortgage costs and household expenses. At this point, it’s important to be realistic. You’ve already determined what extravagances you can do without – and which ones you definitely must hang onto. If you’re a couple that enjoys going out for dinner more than once a week, embrace this fact. There’s absolutely no use in saying that your weekend dine-outs will end once you sign that mortgage. In fact, chances are you’ll continue to dine out – and the additional cost will leave a growing balance on your credit cards.
It’s also important to keep in mind that ownership carries more costs than renting. Be sure to factor in condo fees, property taxes and unforeseen maintenance costs into your monthly housing budget. You may also want to factor in non-housing related costs for example, if you’re moving from the city to the suburbs, you’ll likely have to pay for the additional costs of a car. If your new home is taking you further away from work, your gas bill will likely increase as well.
Once you know how much money you can devote to housing on a monthly basis, put those mortgage calculators back to good use and figure out how much of a total price tag you can afford. Once you have that maximum number, try not to look at homes that fall outside of it. It’s easiest just to avoid the temptation all together.

Friday, August 19, 2011

The Top ten things that DON’T make me a 'good' mortgage broker

This is an article written by a mortgage broker in Kelowna that I greatly respect and admire! She's one of the keys to my success in this business; I greatly respect her vision for this industry and her unwavering values (and I agree and follow them as well). She tells it like it is around here, even when it isn't popular or part of the status quo!

If you're thinking of purchasing or refinancing a home in BC, call Julia. She'll tell it like it is...

The Top ten things that DON’T make me a 'good' mortgage broker
by J. Krause Mortgage Services on Thursday, 18 August 2011 at 18:45.

As a mortgage broker, it seems like I'm constantly bombarded these days with ‘propaganda’ about the ‘top brokers’ in Canada; the ones who do the most business and make the most money. Quantity has become more important than quality. But silly me, I still believe it’s all about the client, and getting the client the best possible mortgage option for their individual needs. It’s not about me and how much ‘volume’ I do. Because of this, the industry probably wouldn’t consider me a very ‘good’ mortgage broker… so I’ve come up with the top ten things about me that DON’T make me a 'good' mortgage broker:

1) I get to know my clients; I don’t just move ‘em in and move ‘em out. I want to get to know them, and I want them to know me. Time consuming? Yes… but that’s how I roll.

2) I’ve been around a while and I actually know what I’m doing. I learned the business by working as an assistant for a few years before I became a broker. Now I have years of experience. And I also know the rules. If a client wants me to bend or break one of those rules, sorry, but I won’t risk my license and my reputation just to make a few bucks.

3) I’m a big ‘explainer’. I explain EVERYTHING about the mortgage process, but not all at once. One step at a time so the client doesn’t get a case of ‘information overload’. Time consuming? Yes… but that’s how I roll.

4) I’m there for my clients after-the-fact. They can call me with any questions any time, and I will never just say “Call your lender”. I always have time to chat with my clients and help them out with any concerns or questions.

5) I stay up to date on what’s happening with interest rates and the economy so my clients don’t have to. I would never expect them to… that’s my job. And I create my own newsletter four times per year - no corporate-looking junk mail for me. Time consuming? Yes… but that’s how I roll.

6) I’m too honest. If a client is getting into something beyond their means, I tell them so. If they go to another mortgage broker to get it done, so be it. At least I didn’t put them in a risky situation.

7) I don’t mind if my close friends DON’T come to me for a mortgage. I understand that for some people, their financial situation is PRIVATE, and maybe they aren’t comfortable spilling all the details to me (but I still give them tips & advice…)

8) I get excited for my clients when they find a place they want to buy, but then I feel the same disappointment if, for whatever reason, they don’t qualify a mortgage.

9) I’m incapable of pressuring my clients to do something or make a decision. I want my clients to feel comfortable and confident about their decision.

10) I don’t believe in ‘sales tactics’. I give my clients choices; I don’t just give them one option and say ‘take it or leave it’. I explain the differences in each option so they can make an informed choice of their own. Time consuming? Yes… but… well, you know.


Edmonton is getting a spanky new museum, which one will you choose?

The Province has released four new designs for the soon-to-be-built Royal Alberta Museum in the downtown core. They are asking the public to voice their opinions on the designs to help the government in choosing a winning concept.

This is a building that will shape our downtown!
Please take a few moments to view the submission and offer your feedback:

Monday, August 15, 2011

Your Home Purchase: Part 2

The average Canadian homebuyer takes 11 months to plan their purchase, according to CMHC. If you’re thinking about buying in the next year, our four-part series will explain how you should be dividing your time.

Part 2: The Pre-Approval

There is no better tool to help you obtain a true picture of your housing budget than a mortgage preapproval. Unfortunately, less first-time buyers are taking the time to get one.
According to TD Canada Trust’s First Time Homebuyers report, 91% of first-time buyers were pre-approved for a mortgage before house shopping in 2010, and that number fell to 76% in 2011.

There’s no real reason why less homebuyers should be taking advantage of the opportunity to get preapproved for a mortgage especially if you’re dealing with a mortgage broker. With one glance into your credit score, we can use the information to see which lenders are willing to approve you for a mortgage, at what rate and for how much.

While this approval isn’t etched in stone the lender will still want to see proof of income and other personal details upon approval, and if you’re putting less than 20% down, your mortgage insurer (i.e. CMHC or Genworth) will also have a final say it nevertheless gives you a good picture of what type of funds are available to you, and at what rate.

Not only does this help you put a more accurate budget together and ensure your house hunting endeavours fall within your allotted price range but, in many cases, it also allows you to secure the best available rate. Most lenders will hold their best rate for you for 90 days (and sometimes 120 days) upon preapproval. If you don’t find a home within that time (or if you just haven’t had a chance to start looking) you can obtain another preapproval hassle-free.

For the amount of effort it takes to call up your mortgage broker and obtain a preapproval, it’s definitely worth the added convenience. In many cases, we can do the legwork online, and have it turned around within a business day or less.

Monday, August 8, 2011

Your Home Purchase: Part 1

The average Canadian homebuyer takes 11 months to plan their purchase, according to CMHC. If you’re thinking about buying in the next year, our four-part series will explain how you should be dividing your time.

Part 1: Getting your ducks lined up
While you don’t necessarily need a year to plan your home purchase, a little preparation never hurt anyone – in fact, it’s been known to save people money. Below are a few things you can do right out of the gate that can save you hassles (and plenty of headaches) in 11 months time:

a) Become one with your credit score
There’s nothing worse than finding your dream home and realizing, upon talking to the bank, that you don’t have good enough credit to obtain a mortgage. That’s why the more in tune you are with your credit score and the earlier you’re in tune with it the better.

Both of Canada’s two major credit bureaus Equifax and TransUnion offer one free credit report per year. Take advantage of this offering to make sure you don’t have any outstanding bills you didn’t know about, or incorrect charges on your report. If you do, a year is usually enough time to clear up any minor blemishes so that your score is in tip-top shape when it comes time for that pre-approval. Remember – the better your score, the better your rate (and the more money you’ll save in the long run).

b) Establish your household budget
If you don’t already have one, now is the time to sit down and draft an accurate household budget. This means going through your expenses, tracking your spending and figuring out which luxuries you can’t live without and which ones you might be able to trim.

This will likely be a work in progress, and something you’ll revise over the coming months as you (and, potentially, your partner) receive raises, change jobs or simply learn to reign in your spending. Once you get into the habit of it, you’ll be able to determine how much you can really afford to spend on housing every month, which will come in handy later on.

c) Estimate your potential mortgage payment.
While you don’t have to know the details quite yet, it pays to know roughly how much your ideal home is going for price-wise, where interest rates are sitting, and how much you’re aiming to have for a down payment.

Once you have these numbers in mind, you’ll be able to plug them into an online calculator and figure out how much a monthly mortgage payment is likely to cost. Once you know this magic number, determine the difference between that and the current rent you’re paying and sock it away. Not only will this help you get used to the added costs of a mortgage payment, but it will also help you establish a bit of a savings fund either to strengthen your down payment or use as an emergency fund for the day something inevitably needs repair in your new home.

-Courtesy of Axiom Mortgage Partners

Tuesday, August 2, 2011

Turning your principal residence into a rental

So, you're ready to move out of your starter home and into a larger residence. The thing is, your first home is so well-located that you'd love to hold onto it for a little longer - and maybe use it as a tool to launch you into the rental market. Before you make the commitment, however, here are a few things to consider:

1. Will you need to refinance?

Chances are, in the time you've owned your primary residence, you've had an opportunity to build up equity. The question is, will you need some of this equity to use towards a down payment on a second home - or do you have a separate down payment fund saved up?

If you need to tap into your home's equity, you're going to have to refinance - and you can only do so up to 85% of the value of your home. You'll also have to consider that, with a refinance, you'll likely have to take on a new mortgage term, rate and amortization - and, depending on the details of your mortgage, this may come with some hefty fees. It should also be noted that keeping that 35-year amortization with less than 20% equity can prove difficult since it's been phased out under new government rules.

2. Ensuring positive cash flow.

If you have to pull out some equity in your home for a second down payment, your mortgage payments are going to increase on your primary residence. For a rental property to make sense, you're going to have to make sure that you have positive cash flow - which means the going rental rate can cover your mortgage payments, property taxes and maintenance costs. Check out similar rental properties in your area either through, or

To keep your costs as low as possible, it's best to go with the longest amortization you can get your hands on - and the lowest mortgage rate.

3. Tax implications.

If you end up using the money from your refinanced first property as a down payment for your second, you're going to find it difficult to legally take advantage of the tax deductibility of your new rental property. This is because borrowed funds are only tax deductible if they're used to fund a rental property - and you'll be using them to fund a new primary residence. This article at Million Dollar Journey does a great job of explaining the issue, and ways to get around it:

4. Are you really ready to be a landlord?

Becoming a landlord brings on its own new set of responsibilities - and potential late-night emergencies. Before you pull the trigger, really think about if you're ready to take care of the maintenance needs of two residences - and if you're prepared to carry the costs of two residences if you can't rent your first one out for a month or two.

For further reflection, consider reading these articles about nightmare tenants:

13 outrageous tenant excuses

Tenants from hell