The initial Bank of Canada rate cuts this past summer did not spur housing activity as anticipated, but potentially more on the way will continue to affect the housing market outlook. New listing levels are expected to rise as sellers who may have held back enter the market with the hope that lower mortgage rates will attract additional buyers.

While the current Bank of Canada rate of 4.5% may still not be enough to make a dent in home affordability, it does provide a glimmer of hope for potential buyers as interest rates continue to fall.

Canadians across the country are anxiously awaiting additional rate cuts, promoting future home affordability. While consumer confidence is beginning to rise, mortgage affordability will need to be balanced with rising unemployment to reduce the number of households with strained budgets.

In addition, while home prices have cooled a bit, home prices in Canada remain among the highest in the world’s most advanced economies (Japan, France, Germany, Italy, and the UK). These still -high prices have resulted in many potential first-time home buyers to withdraw for now. Higher property taxes, higher qualifying stress-test rates, and the current wave of mortgage renewals will also factor into how successful the Fall market will be.

In 2023 alone, the country saw an influx of 46% of new Canadians, which also contributes to housing demands and pricing. As rates continue to drop, the hope is that prices will stabilize owing to increased supply as demand rises.

If you are looking to get into the housing market as a buyer or seller, or simply have questions so you can best prepare yourself for a future move, don’t hesitate to reach out to me today!

1. Buying a home with a 5% down payment is available to everyone. Contrary to popular belief, you don’t have to be a First Time Home Buyer, this is available to anyone as long as you qualify. In theory, you could turn your current home into an investment property and buy another home with only a 5% down payment. Rules state that any home purchase over 500k requires a 10% down payment. ie. 700k home purchase price. 500k @ 5% down payment = 25k and 200k @ 10% down payment = 20k. $25k + $20k = $45k down payment required.
2. 
   You can even buy a home with 0% down. Assuming you qualify, you’re allowed to borrow the minimum required 5% down payment from your LOC, Credit Card, Installment Loan, etc, and use it to buy a property. Keep in mind, the lender will need to factor in the monthly payments associated with the borrowed funds.
3. 
   You could knock 2 years and 8 months off your mortgage by simply changing your payment frequency to accelerated. For example, if your current mortgage payment is every 15 days you would just change it to every 14 days. If your current payments are once a month, just divide that payment by 2 and make that payment every 14 days. I assumed a 25 year amortized mortgage for this example.
4. 
   The potential mortgage penalty for a fixed-rate mortgage can be 4 to 8 times higher than a variable rate mortgage. Variable-rate mortgages come with a predictable 3-month interest penalty no matter if you break it at month 5 or month 45. Fixed-rate penalties are the higher of 3-months interest or IRD (Interest rate differential). Every bank/lender has their own formula for calculating IRD, with some more favorable than others. Both variable and fixed rates have their pros and cons…the variable’s advantage is the potential lower penalty which equals flexibility.
5. 
   For a refinance, you can borrow up to 80% of the value of your home. For example, based on a home valued at $600k and a current mortgage balance of $380k the maximum mortgage allowed would be $480k. The maximum equity you could access would be $480k – $380k = $100k Equity Take Out.
6. A Home Equity Line of Credit (HELOC) is a great tool to have. You can use your HELOC to pay off higher-interest debt. Keep making the same payments as you were and the debt will be paid down more quickly. A HELOC arguably gives you access to the cheapest money on the market so you might as well use it when you can. As always, if you have questions about anything, I am here to help.

Being on the path to purchasing a home is one of the most exciting and most rewarding moments in life!

To help make the mortgage process smoother, one of the things you can do is to get pre-approved for your mortgage. Getting pre-approved doesn’t commit you to a single lender, but it does guarantee the rate offered to you will be locked in from 90 to 120 days which helps if interest rates rise while you are still shopping.

Rate holds for mortgages offer several benefits including:

1. Protection Against Rate Increases: A rate hold guarantees that you will receive a specified interest rate for a set period, typically up to 120 days. This protects you from potential rate hikes during this period. Plus, if the rate should drop, you can still take advantage of the lower option!
2. Financial Planning: Knowing the exact rate you will pay allows for better financial planning and budgeting. It provides clarity regarding what you can expect for your monthly mortgage payments. This makes it easier to target the right price range of home so that you can ensure future financial stability.
3. Time for Decision Making: A rate hold provides peace of mind allowing you the necessary time to shop around for the right home. During this time, you can also compare different mortgage options without the pressure of changing interest rates. This is particularly useful when you’re considering different lenders or mortgage products.
4. Stress Reduction: It reduces the stress of rate fluctuations and uncertainties in the housing market. After the past few years of turmoil, knowing that you have a secured mortgage rate can take a lot of the pressure off shopping. Instead of feeling like you need to find a new home before the rates change again, you can take the appropriate time. Plus, if your rate hold expires, it is easy to submit for a new one!
5. Securing a Competitive Rate: While we are not anticipating interest rate increases in the coming years, securing a rate hold while you shop can save you money over the long term by locking in a favorable interest rate should anything pivotal happen in the market.

Overall, rate holds provide peace of mind, financial security, and the opportunity to make informed decisions when entering into a mortgage agreement. They are particularly valuable in fluctuating interest rate environments or when you anticipate delays in finalizing a mortgage transaction. Looking to purchase a home? Want more information on rate holds and the mortgage process? Reach out today.

Whether you’re looking to sell your home this year, or just want to make some updates, I have put together six small home improvements that can make a big impact on your space! From improving saleability to refreshing your home, here are some simple and affordable ideas to help get you started:

• Painting: One of the easiest ways to spruce up your home for a refreshed vibe or sale is to add a new coat of paint! While it is a relatively simple task for a new homeowner to take on, you might be surprised at how many people will pass on a house because they are not a fan of the paint colors or the flooring. A fresh coat of paint – especially more neutral colors such as beige, cream, light grays, and soft blues or greens – can do wonders to make a home feel appealing.
• Light Fixtures: I don’t know about you, but I haven’t taken a good look at my light fixtures in a while. However, potential buyers will! Light fixtures are another low-cost and relatively easy improvement you can make to your home. Upgrading to newer styles and ensuring they are clean, with fresh LED bulbs, will help add an extra sparkle to your home!
• Update Your Hardware: Another overlooked aspect of a home are light switches and door handles. If your home is 20 years old, most likely your white light switch covers are not so “white” and your door handles are a little worn down. These are a cheap and easy replacement that will go a long way to boost your interior!
• Swap Out Your Window Coverings: Just like with a fresh coat of paint or new hardware, swapping out your window coverings is a small change that can make a big impact. Change your stale, white plastic blinds for wooden slats, or update your curtains to something fresh and vibrant!
• Refinish Your Cabinets: The kitchen is known to be a central space in most homes, but did you know roughly 80% of homebuyers feel that it is the most important space to consider when deciding on a new home? While a full kitchen renovation may be out of the question and all-new kitchen cabinets can cost thousands, there is a third option. Refinishing or repainting your cabinets is a great alternative for breathing new life into your kitchen!
• Curb Appeal: They say don’t judge a book by its cover but, when it comes to selling your home, first impressions matter. This is where curb appeal comes in! If a potential buyer pulls up to see overgrown weeds, clogged gutters, or cracked concrete, they are already going to have a negative impression of the home and it will be harder to impress them once they are inside. Attending to landscaping and any outside maintenance needs will go a long way in making your home more appealing. A pressure wash and a new coat of exterior paint can also do wonders to give your home a facelift!

By putting the effort into completing a few small changes around your home, you can reap big rewards when it comes time to sell – and increase your comfort in the interim!

Buying a home is one of the most exciting ventures in life! To ensure it goes smoothly, you need to have a proper budget in place to protect your financial security and help you make the best decision for your future location. However, the cost of the home is not the only cost that you need to budget for! The temptation will always be to start looking at the very top of your budget but fees, such as mandatory closing costs, can easily put you over the top. Knowing the real numbers will make it that much easier to stay within your budget and maintain your financial comfort.

Closing costs are a one-time fee associated with the sale of a home and are separate from the mortgage insurance and down payment. Typically, these costs range from 1.5-4% of the purchase price, depending on your location. This means, for an $800,000 home, you would be looking to budget around $22,000 on average.

Here are a few closing costs to keep an eye out for:

• Land Transfer Tax: This is calculated as a percentage of the purchase price of your home, with the amount varying in each province. Some cities, such as Toronto, also have a municipal LTT.
• Legal Fees and Disbursements: You can expect to incur a minimum of $500 (plus GST/HST) on legal fees for the preparation and recording of official documents around your purchase.
• Title Insurance: Most lenders require title insurance to protect against losses in the event of a property ownership dispute. This is purchased through your lawyer/notary and is typically $300 or more.
• PST on CMHC Insurance: Though CMHC insurance itself is financed through the mortgage, PST on the insurance is typically paid at the lawyers and sometimes deducted from your advance.
• Home Inspection Fee: A home inspection is highly recommended as a condition of your Offer to Purchase to prevent any future surprises. This can cost around $500.
• Appraisal Fee: An appraisal is performed to certify the lender of the resale value of the home in the case you default on the mortgage. The cost is usually $400 – $600 but is typically covered by the lender.
• Property Insurance: Property insurance covers the cost of replacing your home and its contents, and must be in place on closing day. This is paid in monthly or annual premiums.
• Prepaid Utility Bills: You may need to reimburse the previous owner of your property for prepaid costs such as property taxes, utilities, and so forth.
• Property Taxes: Property taxes are due on an annual basis and are calculated as a percentage of the home value and vary by municipality. You also may need to reimburse the previous property owner if he/she has already paid property taxes for the full year.

Knowledge is power and understanding all costs associated with purchasing a home can help you create a realistic budget and ensure you remain within your financial means. Contact me if you have any questions about your current purchase process or if you are looking to buy a new home now or in the future!

What is Aging in Place?

Aging in place refers to living safely, comfortably, and independently in your home for as long as possible. It involves having access to necessary services, healthcare, and support to ensure security and comfort at home.

The Benefits of Aging in Place

More than 90% of Canadians dream of aging in place. Staying in your home allows you to remain rooted in your community and preserves the memories you’ve created. It also means maintaining independence without adhering to a structured mealtime or activity schedule. Being close to family and friends and continuing day-to-day activities that bring meaning and fulfillment can enrich your quality of life.  Here’s a quick overview of the benefits of aging in place:

• You don’t have to downsize your home or your possessions
• Enjoy the comfort and familiarity of your home and surroundings
• Maintain control over your daily schedule
• Keep your independence and privacy

Overcoming Challenges with a Reverse Mortgage

Financial challenges, reduced mobility, and costly home modifications can make aging in place difficult. Fortunately, a Reverse Mortgage can allow Canadian homeowners aged 55+ to access up to 55% of their home’s value in tax-free cash. You can receive funds as a lump sum, monthly, quarterly, or a combination, with no required payments until you move or sell your home.

How a Reverse Mortgage Supports Aging in Place

Here are three ways that funds received from the CHIP Reverse Mortgage can support you:

1. Home Improvements for Accessibility:  Enhance your home’s accessibility and safety, such as adjusting electrical switches or relocating the laundry room to the main floor.
2. At-Home Care: Hire cleaning services or in-home caregivers to ensure you receive the necessary assistance.
3. Support for Assisted Living: A Reverse Mortgage can provide financial support if a spouse or loved one needs to transition to assisted living.

Contact me to discover how the CHIP Reverse Mortgage can empower your journey of aging in place.

Is your home in desperate need of an upgrade? Are you dying to renovate your bathroom, kitchen, or other space but not sure how to fund this renovation project? Did you find a home you’d like to buy but it needs work?

We’ve got good news! When it comes to covering the costs of renovating, there are some options available to you outside of some good ole savings!

Mortgage Refinancing

One option for funding a renovation could be through mortgage refinancing. Some mortgage products may allow you to refinance in the middle of your term, or only at the end of that, but you will want to check with your mortgage professional. This is best suited to larger-scale renovations or remodels.

• Refinancing will allow you to borrow up to 80% of your home’s appraised value (less any outstanding mortgage balance).
• Refinancing your mortgage (if approved) will allow you to access funds immediately and tends to have lower interest rates than a standard credit card or personal loan.

Purchase Plus Improvements (PPI) Mortgage

If you haven’t yet bought that home, financing your renovation at the time of purchase with a purchase plus improvements mortgage can save you some hassle down the line. This type of mortgage is available to assist buyers with making simple upgrades, not conducting a major renovation where structural modifications are made. (exceptions to this do exist!)

• Simple renovations include paint, flooring, windows, a hot-water tank, a new furnace, kitchen updates, bathroom updates, a new roof, basement finishing, and more.
• Depending on whether you have a conventional or high-ratio mortgage, if it is insured or uninsurable, and which insurer you use, the Purchase Plus Improvements (PPI) product can allow you to borrow between 10% and 20% of the initial property value for renovations or a maximum dollar amount.

Line of Credit or Home Equity Loans

Lastly, you always have the option of utilizing a secured line of credit or home equity loan to pay for your renovation.

• Securing your renovation loan against the equity in your home can typically be up to 80% of the property value; accessible at any time. This will typically provide lower interest than non-secured financing and allows you to access funds at any time.

If you’re looking at doing a small or large renovation this year, make sure to reach out before you start to ensure you’re making your money and mortgage work for you!

A few simple steps to healthy credit…

Just like you should have a physical every year to make sure you’re healthy, you should do the same for your credit report and score.

Don’t wait until you go to buy something and are turned down. And don’t worry… chequing your own credit does not affect it. So, what should you be looking for?

MISTAKES

Make sure your personal information is correct and up-to-date. Also, check that your date of birth and any other identifying information is correct as well.

ERRORS

Even creditors make mistakes sometimes so carefully look over any negative information appearing on your credit that isn’t true. Creditors are required to change any errors that you find on your report.

HINT: Send a letter to the credit bureaus, as well, to let them know there was an error and send a copy to the credit agency who incorrectly reported to motivate them to take care of it in a timely manner.

OUTDATED INFORMATION

Credit agencies are required to remove certain information from your credit after a certain number of years. For example, if you got behind on your payments but then went back to your normal payment schedule, that late history is to be removed after 6-7 years. Don’t assume it will be. Be proactive and follow up to make sure it was done.

FRAUD

We all know someone who has had their identity stolen and nothing wrecks a credit score and report more than someone hijacking it. It doesn’t necessarily have to be a stranger either. Family and friends have been known to “borrow” someone’s credit. Be smart and make sure to protect your credit from the known and the unknown.

WHY DO ERRORS MATTER?

Even minor errors like a misspelled name or a wrong address can keep you from getting a loan or even lower your credit score. Keep your credit as healthy as possible by checking it every year. Choose a day that will be easy to remember like your birthday or the day you file your taxes.

As we gear up for the approaching summer season, why not revitalize your outdoor area to bask in the warmth and embrace the sunshine? There’s a plethora of fantastic outdoor projects awaiting, whether it’s in your backyard or on your balcony, to elevate your space and maximize your enjoyment of the season.

Let’s explore some fresh ideas:

1. Introduce an Outdoor Rug: A simple yet effective trick! An outdoor rug effortlessly injects vibrancy into your space without the hassle of extensive renovations. It’s an economical choice that can remarkably enhance the ambiance.
2. Embrace a Fountain: Whether grandiose or petite, fountains add an enchanting touch to any outdoor setting. Beyond aesthetics, the gentle sound of flowing water promotes serenity, enhancing your relaxation experience.
3. Illuminate with String Lights: Transform your space with the whimsical allure of fairy lights. These versatile adornments, available in various designs and hues, are a budget-friendly way to infuse charm and create a captivating atmosphere.
4. Craft a Vertical Garden: Maximizing space is key, even in compact areas. Consider a vertical garden, featuring low-maintenance plants like succulents. With a bit of creativity, repurposed materials can yield stunning results, elevating your greenery game.
5. Adorn with a Trellis: Elevate your outdoor aesthetic with a trellis, adding architectural interest and serving as a focal point for your garden or seating enclave. It’s a simple yet impactful addition that can redefine your outdoor space.
6. Design a Garden Path: Establishing pathways enhances both functionality and aesthetics. Opt for materials like stone or gravel for easy upkeep, adding structure and a sense of seclusion to your outdoor retreat.
7. Furnish with Comfort in Mind: Transform your patio into a cozy haven with thoughtfully selected furniture pieces. From loungers to dining sets, each addition contributes to a welcoming atmosphere. Consider DIY options using wooden pallets for a personalized touch, accentuated with vibrant cushions for a pop of color.

Remember, regardless of the size or layout of your outdoor space, infusing it with your unique style can significantly elevate your enjoyment. Seize the opportunity to curate your personal oasis and savor the season to the fullest!

One of the best parts about life is that it is ever-changing. This is one reason mortgages are available on short-term contracts (such as the standard 5-year) so that you can adjust your mortgage over time to best suit your needs. However, in some cases you cannot wait until the term is up. In fact, roughly six out of ten homeowners with the standard five-year fixed rate mortgage break their terms within three years.

There are a variety of reasons to refinance your mortgage such as wanting to leverage large increases in property value or get equity out of the home for renovations. In some cases, you may be unable to wait until the term is up due to life events such as divorce, a new relationship, kids going off to college or needing to consolidate debt.

Before you refinance, it is important to understand that if you do this during your term you will be breaking your mortgage agreement and there are penalties that come with that. If at all possible, it is best to wait until the end of the mortgage term before refinancing, however some lenders can also add funds in different ways that avoid penalty such as second mortgage, or a blended rate calculation.

If a penalty is involved,  it is important to understand how your lender is going to calculate the penalty if you break a fixed-rate mortgage. The penalty will be the higher of 3 months interest or something called Interest Rate Differential (IRD). Most banks calculate IRD penalties based on the discount you were given from the posted rate at the time that you signed your mortgage agreement. The bank firstly takes their new posted rate for whatever time you have left in your mortgage – if you break a five year contract on year three, this would be two years – and apply the same discount they first gave you. The difference between the two shows them the amount of interest they would lose for the rest of the term based on your current balance. This is what then becomes the penalty for breaking your fixed-year term and, in many cases, can be quite hefty. Other lenders such as monolines will use the actual difference in their real rates to make the IRD calculation.

Beyond the penalties, there are a few other points to consider before refinancing:

• You can tap into 80 per cent of the value of your home
• You cannot qualify for default insurance on a refinance
• You would have to re-qualify under the current rates and rules – including passing the “stress test” again

So what can you do? There is an option to sign a fixed rate for a shorter term, such as three years, or you can also consider a variable rate as the penalties for breaking these mortgages are much lower.

Talking to a mortgage broker about refinancing can provide you access to even greater rates and mortgage plans to best suit your needs and what you are trying to accomplish through your refinancing strategy.

BENEFITS OF REFINANCING

Regardless of why you are looking to refinance, it can come with a host of great benefits when done properly!

1.   A Lower Interest Rate

Depending on where you are in your mortgage term, you could refinance to get a better rate – especially when done through a mortgage broker. On average, a mortgage broker has access to 90 lenders and is able to find you the best rate versus traditional banks which only have access to their own rate.

2.   Consolidating Your Debt

When it comes to debt, there are many different types from credit cards to lines of credit to school loans to mortgages. However, many types of consumer debt have much higher interest rates than those you would pay on a mortgage. Refinancing can free up cash to help you pay out these debts. While it may increase your mortgage, your overall payments could be far lower and would be a single payment versus multiple sources. Keep in mind, you need at least 20 percent equity in your home to qualify.

3.   Modifying Your Mortgage

The beauty of life is that it is ever-changing and sometimes you need to pay off your mortgage faster or change your mortgage type. Maybe you came into some extra money and want to put it towards your mortgage or maybe you are weary of the market and want to lock in at a fixed-rate for security. It is always best to do this when your mortgage term is up, but talk to a mortgage specialist about potential penalties if waiting is not possible.

4.   Utilize Your Home Equity
One of the biggest reasons to buy in the first place is to build up equity in your home. Consider your home equity as the difference between your property’s market value and the balance of your mortgage. If you need funds, you can refinance your mortgage to access up to 80% of your home’s appraised value in cash!

If you are considering refinancing your home, or wondering if it is the best option for you, don’t hesitate to reach out today for expert advice and to review all possible options.