On February 16, 2010, Minister of Finance Jim Flaherty introduced new mortgage rules designed to make it a harder for buyers to qualify for high-ratio mortgages and to discourage speculators. This protectionist measure is targeted at over-extended consumers.
The first rule is that all borrowers must meet the standards for a five-year fixed-rate mortgage, even if they are taking out a mortgage with a lower interest rate and a shorter term. This rule is designed to make sure buyers will be able to pay if and when interest rates rise.
If you were to buy the average price home $337,000 you will now need $9,200 more in annual income to qualify.
Rule # 2 restricts how much of your home you can refinance. Now you can only refinance 90% of your home as opposed to the previous 95%. Often homeowners will keep using the equity they have in their home to finance their lifestyle. A home is a savings vehicle where you build equity. If you still need to dip into that equity it may be time to reevaluate your finances to see where you can be cutting back.
For investors or non-owner-occupied properties you now need to have a minimum 20% down payment.
The effective date of these new rules is April 19th. Any agreements that are finalized before April 19 will be based on the old rules. Moreover, any agreements that close after April 19 but were signed before this date will be allowed to go through under the old rules. Any new deals after April 19 will be subject to the new rules.
When considering your new home, you have to set a budget, decide how many bedrooms and bathrooms you need, and pick a neighbourhood, but you also need to consider what your home has to have to meet your requirements.
I know on my wishlist I had main floor laundry and a direct garage access. Both of which I got and love. I wish the laundry room was bigger and had a window so I could at least get a view of outside while folding my laundry, but alas, not to be. At least not in this house.
So what is on you wishlist?
A “green” home?
A big eat-in kitchen?
Open concept living space?
Master ensuite? Do you want it to resemble a spa?
Do you work from home and need a home office?
Finished basement?
Outdoor living space?
A hot tub?
Etc.
These are just a few ideas. It is really important to consider your lifestyle and what you need in your home to make ti work for you.
I am facing a dilemma with the Toronto Real Estate market right now and that is there are not enough homes to show all the buyers who are actively looking. And I am not alone. Lots of Real Estate Agents are feeling the same crunch.
The only people really winning are the sellers. Their homes are selling quickly with multiple offers and going for over asking.
Currently in Central Toronto there are only 1,745 homes on the market and this includes condominiums. Last year at this time there were 3,398 homes on the market.
So yes, this is great for sellers but for buyers it is very frustrating to completely lose out on homes in multiple offers, multiple times, and to see prices going up with each subsequent new listing in the area.
So I am not going to tell you to wait until spring to list your home this year but to list it NOW! In fact, I am almost begging you to list your home. My last two listings have sold very quickly and for great prices. I can help you take advantage of this sellers market. Call me today.
The Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $25,000 from your registered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself or for a relative with a disability.
You have to be a first time homebuyer, meaning you could not have occupied any home as the principal place of resience.
If you are planning on making a contribution to your RRSP in 2009 you have until the end of February to do so but keep in mind you must have the funds in your RRSP for at least 89 days before you can withdraw it again to use for the HBP.
Bright 4 Bedroom Home Built By Townwood Homes In Bayview North. Open Concept With Clear Storey Foyer, Upgraded Oak Staircase. High Ceilings And Crown Mouldings Throughout Main Floor. Separate Living Room And Dining Room. Eat-In Kitchen With Centre Island And Lots Of Cabinets. Main Floor Laundry With Direct Garage Access.
His/Hers Closets In Master Bedroom, Double Sinks And Large Soaker Tub. Large Fenced Yard And Porch On Front Of House For Outdoor Living. Includes
Bright 4 Bedroom Home Built By Townwood Homes In Bayview North. Open Concept With Clear Storey Foyer, Upgraded Oak Staircase. High Ceilings And Crown Mouldings Throughout Main Floor. Separate Living Room And Dining Room. Eat-In Kitchen With Centre Island And Lots Of Cabinets. Main Floor Laundry With Direct Garage Access.
Extras: His/Hers Closets In Master Bedroom, Double Sinks And Large Soaker Tub. Large Fenced Yard And Porch On Front Of House For Outdoor Living. Includes
Well, the kids are back at school and it feels like the hazy days of August. I am finding it hard to get back into the swing of things.
In recent weeks, I have been so busy with Toronto home buyers. The only challenge I have been finding is with inventory. There is nothing out there to show. Listings are down over 37%. Often I will have a buyer send me a list of homes they wish to see and their schedule. By the time we go to see the homes they are either sold or taking offers that evening. It is crazy out there and buyers really need to be prepared to put in an offer. This includes doing a home inspection and making sure they have a pre-approval from a mortgage broker. Rates are still incredibly low. As a Sutton Agent I can offer you the lower rate in Canada if you buy a home with me.
If you are thinking of selling your Toronto home as Nike would say “just do it!”. The market is hot and you may even end up getting more than your list price depending on a number of factors including condition of your home and competition in your neighbourhood.
Happy Home Shopping Toronto and speak to you soon.
Moving can be a very chaotic and expensive task, one that needs to be accomplished very carefully. A move carried out in haste can bring about several unnecessary problems. Almost everyone looks for cheap movers. After all, most of us want to save on out of pocket expenses but there are several disadvantages of selecting cheap movers. There are professional moving companies, who offer competitive rates that are easily affordable by everyone. However, there are certain techniques or methods of preparation that can also help you minimize your expenses.
When planning your moving budget, it is very important to keep a check on the outflow of cash. This will make you better prepared to understand the unnecessary expenses. Create a budget template in Excel or Microsoft Word—this will make your calculations easier.
Decide if you will hire a professional moving company or you will do it yourself. If you are hiring a mover, collect quotes from at least three different professional moving companies and include the highest quote in your budget.
Check all the items that you are moving. This will help you evaluate if you need more insurance because the default insurance offered by movers might not be sufficient for you. Along with added insurance, find out if you require extra services.
Because of rising fuel costs and a shortage of drivers, the cost of a full service mover has risen in the past few years. Anything you can do yourself—even if seemingly small—will help cut your moving bill and give you extra money to spend on other relocation costs (like the pizza and beer for after your move).
1. Reduce your load. Get rid of household items that you no longer need. Hold a garage sale and leave books with friends, the local library or sell them to a used bookstore. Anything you can’t sell, give to a local charity. Weight equals money. The less weight, the less money. It’s that simple.
2. Pack it yourself. Packing services performed by the mover are expensive and could amount to 25% of the moving cost. Even if you don’t want to pack it all yourself, you can always do a partial pack, and have the movers handle the rest. For example, items that are nonbreakable such as linens and bedding can be packed easily without the risk of damage. Every box you pack yourself is money in your pocket.
3. Save on packing. Luggage and carrying bags are perfect for packing sheets, towels and clothing. Also, the bottoms of wardrobe boxes are great for bulky, lightweight items. Be wary of packing tips that might save you money initially but won’t protect your stuff, for example, using newspaper instead of bubble wrap. Sure, it might save a few bucks, but in the end, is breaking something worth it?
4. Drive your own moving truck
Using a full service moving company is extremely expensive. You can rent your own truck and hire movers to help load up and unload.
5. Recruit help from friends or family
If you have friends or family in the area, getting them to help you load up and/or unload is a blessing, because it saves time and money. If you’re going to recruit help, make it a fun event. Order some food, and make it a moving party.
6. Avoid the busy season. If you are using a full service moving company, avoid June, July, and August as these are the most expensive months to move because of demand for moving services. Also, try to plan your move during the middle of the month—rates are higher at the beginning and the end because of the large number of apartment leases with month-end dates. If you can be flexible with your move-in times, you can also save money because the moving company can combine shipments.
7. Get organized. Time is Money. Color-code boxes according to the room they belong in so they all end up in the same place, saving time for both you and your mover.
8. Avoid storage costs by moving into your new property immediately and make sure that you have payment ready for when the truck arrives. Any delay could result in storage-in-transit fees if your things have to be stored until they can be unloaded and after the move is paid in full.
9. Make sure you are insured. Your existing homeowner’s insurance policy might cover your move so you don’t have to buy additional moving protection.
10. Your move may be tax-deductible. Keep all receipts and visit the Canada Revenue Agency’s website for specific details about which moving expenses you can claim, or consult a professional accountant to maximize your tax return.
* 0.5% of the value of consideration for the transfer 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.
First-time homebuyers may be entitled to a refund of Ontario’s land transfer tax, up to a maximum of $2,000. This refund is usually claimed at the time of registration.
The Toronto Land Tranfer Tax is calculated as follows:
Price of the Home
Up to and including $55,000.00 0.5% plus
$55,000.01 to $400,000.00 1.0% plus
Over $400,000.00 2.0%
FOR EXAMPLE: A home with a consideration value of $500,000.01 (excluding GST):
0 to $55,000.00 55,000.00 x 0.005 = $275.00
$55,000.01 to $400,000.00 $344,999.99 x 0.01= $3,450.00
$400,000.01 to $500,000.00 $99,999.99 x 0.02= $2,000.00
Total MLTT= $5,725.00
If you are a first-time purchaser of a newly constructed or re-sale residential property. The rebate for first-time home purchasers is up to a maximum of $3,725.00.
Your lawyer applies for the credits for you when registering your home.
Your credit score is used by most companies to see if you are a good credit risk or not. A credit score of over 680 is considered excellent.
What Can You Do to Improve Your Score?
1. Order a copy of your credit report from www.equifax.com or www.transunion.com to review it and make sure there are no errors.
2. Pay your bills on time.
3. If your credit history is questionable, open a few new accounts and use them responsibly.
4. Don’t open accounts and not use them. Having 6 or 7 of the same type of credit does not work in your favour.
5. Keep your balances low relative to your amount of credit available.
6. Pay off credit card debts!
What Does This Mean to Home Buyer’s?
The better your credit score the higher you buying power (income dependent as well). You will also qualify for the best mortgage products at the best rates.
To see what your credit score is and how much of a home you can afford, make sure to talk to your Real Estate Agent and Mortgage Broker before shopping for your Toronto Home.
FINANCIAL PRE-QUALIFICATION:
Speak with your Mortgage Broker or Bank to answer any of your questions, to feel
completely comfortable with the price to pay for your home. You’ll need a T4 & letter
from your employer verifying your income. (I can suggest a number of Mortgage Brokers or
Banks if you haven’t already built a relationship with one as yet.)
2.
REVIEW OF THE STANDARD COSTS:
a)
Provincial Land Transfer Tax :
First $55,000 X .005 = $275.00
$55,000 to 250,000 X .01 = $1,950.00
$250,000 to 400,000 X .015 = $2,250.00
$400,000+ X .02 = $_________
b)
Municipal Land Transfer Tax:
0.5% of the amount of the Purchase Price up to and including
$55,000.00 plus
1% of the amount of the Purchase Price between $55,000.00 and
$400,000.00 plus
2% of the Purchase Price above $400,000.00
c)
Lawyer: Allow +/- $1000.00 (maybe less)
d)
Moving Costs
e)
Home Inspections: General Home $350.00 and up
(depending on the size of home and Sale Price). Termite inspection: allow $200. – $300.
f)
Survey +/- $900.00 – Call me about Title
Insurance $300.00 and up that will eliminate the need for a survey.
3.
THE AGREEMENT OF PURCHASE &
SALE:
Deposit: 5 – 10% of Purchase Price to accompany the Offer.
Conditions: Finance, Home Inspection, Sale of the Purchaser’s
Property.
Irrevocable Date: the date and time before which the offer cannot be
withdrawn
Closing Date: the date that the property changes hands
Requisition Date: the date allowed for title search, usually 2 weeks
before closing
Commonly Used Clauses
Purchase “Agreement of Purchase and Sale” forms
For example: Name, Property address, Legal description, Deposit,
Your choice of Clauses, Chattels, Exclusions, etc.
CASH OFFER
PURCHASER AGREES TO pay the balance of the purchase price in cash or by certified cheque
to the Vendor on closing, subject to the usual adjustments.
CONDITIONAL UPON ARRANGING SATISFACTORY FINANCING
THIS OFFER IS CONDITIONAL upon the Purchaser arranging satisfactory financing on or before
______, otherwise this Offer becomes null and void and the deposit money shall be returned
to the Purchaser in full without interest. The Purchaser reserves the right to waive this
condition at his sole option within the specified time period. The said proceeds for
financing shall be paid to the Vendor on closing as part of the purchase price.
CONDITIONAL UPON QUALIFIED INSPECTION
THIS OFFER IS CONDITIONAL for a period of _____ days from the date of acceptance by the
Vendor upon the Purchaser having the subject property inspected by a qualified home
inspector and finding said inspection satisfactory to him, failing which, this Offer shall
become null and void and the Purchaser’s deposit shall be returned in full without
interest. The Purchaser reserves the right to waive this condition at his sole option
within the specified time period.
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