Welcome to the July issue of my monthly newsletter!
This month’s edition offers 5 tips to affording a home and the importance of a home inspection. Please let me know if you have any questions or feedback regarding anything outlined below.
Thanks again for your continued support and referrals!
5 mortgage tips to help you afford a home
Buying a home is more difficult now than ever—and this is not news to anyone! No matter where you live, the recent stress testing measures, an increase in housing prices in major cities, and a continued increase in the cost of living all combine to make homeownership a daunting task. But we do want to offer some help and solutions for young families looking to get into the market as we truly to believe it’s not impossible and has helped many families do just that!
- Take a step outside of the downtown core. Typically, a property right in the heart of the city is more expensive due to the location and the continued demand. Stepping out to one of the outlying suburban areas can offer more affordable options and can also land you with an increased inventory of properties within your price point.
- Consider finding a rent to own property. A Rent to Own (RTO) property can allow you to rent a property while subsequently saving up for a down payment.
- Talk to a mortgage broker. Speaking with a broker and going through a pre-qualification process can help you by allowing you to see the areas in which you will need to improve to help make you more attractive to lenders. This can include things such as:
- Increasing your credit score
- Decreasing your overall debt or consolidating your current debt.
- Looking at increasing your overall income options and the ways in which you can do that.
- Consider using a co-signor(s) for your mortgage to start with. One solution we have found that works well for certain clients is having a co-signor(s) on the mortgage with a planned exit strategy to remove them once the client’s personal income increases or they are able to qualify for the mortgage on your own (ex. By paying down debts and/or improving their credit score). This solution is situation-specific, so speak to your broker for more details.
- Save, Save, and Save some more. We know this is common sense but speaking with a financial advisor can help show you ways in which you can save and make your money work for you. We can happily recommend a few as can your mortgage broker.
We know that the state of real estate can seem overwhelming and depressing at times. Keep in mind though that not all hope is lost, and you do have options available to you! Remember the “dream” of the white picket fence detached home is not for everyone…now more than ever multi-family properties such as townhouses and condos are offering more and more amenities and beautiful properties for less. The bottom line is considering all your options and work with a dedicated broker who can help you reach your goals—whatever they might be!
A home inspection can give you peace of mind
We’ve all heard the unfortunate stories. Someone with not enough insurance coverage is injured or killed in a tragedy leaving behind a mountain of debt for their loved ones. Often, you don’t want to spend the extra money on insurance, but when something happens it’s the best investment of your life.
The same can be said when you buy a home. It’s easy to get caught up in the moment when you’re looking for your forever home. You see all the glitter, but maybe fail to see not everything is gold. And that’s where a home inspection can come into play. For a roughly $500 investment on the biggest purchase of your life, it should be a no-brainer to have a home inspection, whether the home is 100 years old or brand new.
In many cases, people don’t bother to do a home inspection on a brand new build because they believe there will be no issues. But they may be surprised to learn that even brand new builds can have problems. And certainly, with older homes, there are a plethora of issues, ranging from asbestos and electrical to the foundation.
Getting an inspection will not only give you peace of mind when you sign on the dotted line, but it can also give your realtor an opportunity to negotiate any changes that need to be made to the contract.
But like anything these days, you’ll want to find a reputable home inspector who knows what they’re doing and knows what to look for. There are a number of resources to help you find the best inspector, including the Canadian Association of Home & Property Inspectors (CAHPI).
Even a thorough home inspection may not be able to turn up all the issues with a home. Below is a list of some of the most common latent defects in a home.
1) Bathing Area Issues
Problem: Hidden water damage behind shower/ bathtub surround
Implications: Extra costs will occur, water leaks
2) Pest Infestation
Problem: pest activity in areas of homes
Implications: Damage to a home can occur, extra costs can arise, fire/safety hazards, air quality issues
3) Plumbing Pipes
Problem: Polybutylene plastic fittings prone to leaking, insurability issues
Implications: Water damage and or extra costs can occur, high insurance premiums and deductibles
4) Hidden Water Leaks
Problem: Hidden water leaks
Implications: Water damage and extra costs will occur, structural damage, air quality issues
5) Grade Levels
Problem: Landscaping too high on the structure of the home
Implications: Structural problems, extra costs can and will occur
Summer ‘To-Do’ List:
We truly struggle with assigning you a to-do list for the month of July, but here (it) goes:
√ – enjoy the sunshine.
√ – walk barefoot and wiggle your toes in the grass.
√ – enjoy long summer evenings on a patio, deck, or dock.
√ – take a road trip with friends or family.
√ – make the most of each day.
DID YOU KNOW...
Lenders make more money when they renew your mortgage than on your initial term. This is partly because everything is already set up and there are fewer administrative costs for them upon renewal, but also because many people simply sign the first offer sent in the mail.
In fact, it’s estimated that four out of ten homeowners took the first-rate their bank or lender offered. That’s a scary statistic considering lenders rarely if ever, offer their lowest rate upfront regardless of how long you’ve been a customer!
So here’s what you do: the best way to handle every single mortgage renewal is to give your mortgage broker a call. We will make sure you are getting the best available mortgage product every time!