Tag Archives: CMHC

The Costs of Closing on a Home

Did you know that in addition to the downpayment and mortgage, you’re also responsible for any miscellaneous closing costs associated with your home purchase? These fees can vary in price, but all must be paid prior to taking possession of your home. If you’re currently in the market for a new home, now’s the time to consider these hidden costs so that you can incorporate any additional expenses into your budget.

 Eight Closing Costs to Keep an Eye On

1) Appraisal Fee
Your mortgage lender or mortgage default insurer may require you to provide a property appraisal prior to lending you mortgage monies. This appraisal will determine whether the selling price of your new home is reasonable based on current market conditions. Home appraisals can cost anywhere from $300 to $500, depending on where in Canada you’re purchasing the property.

 2) Sales Tax
If you’re planning to purchase a newly constructed home, or a home that has been substantially renovated, make sure you remember to factor in the HST or GST on top of the list price. Resale homes are not taxable. Luckily, most provinces have HST/GST rebates in place to help first-time home buyers recover some of these costs.

3) Home Inspection Fee
If you’re making an offer on a home, make sure that it’s conditional on the findings of a professional home inspector. Hiring an inspector is voluntary, but highly recommended. An inspection will help uncover any unexpected (and costly!) issues with your potential new home. Home inspections costs between $300 and $500.

4) Property Insurance
Property and content insurance protects your home and possessions against fire, theft, and weather-related damage. Insurance payments, like your mortgage payments, are ongoing so it’s crucial that you keep this cost in mind when building your budget.

5) Land Transfer Tax
The land transfer tax is based on the amount of money you paid for the land. What’s more, municipalities impose a yearly tax on land within their municipal boundaries.

6) Legal Costs
There are a number of legalities that you’ll need to cover when closing on your home. This could include notary services for conducting a title search, registration fees, and the preparation of your mortgage. These fees are normally well over $500, depending on the lawyer you hire.

7) Mortgage Life Insurance
This special type of insurance is separate from your property insurance and your mortgage payments. It is put in place to cover the cost of your mortgage in the event of death or severe illness.

8) Mortgage Default Insurance
If you’ve qualified for a high-ratio mortgage, (this is normally the case for home buyers with less than a 20% downpayment), chances are good that you’ll require mortgage default insurance from your lender. The cost is usually added onto your monthly mortgage payment and rates range from 1% to 3.25%.

Start building your home buying budget today. Consult with a FamilyLending.ca mortgage broker to learn more about these and other unexpected closing costs.

Chantielle Kennedy writer for Familylending.ca

Saving Strategies for Canadian Homeowners

Save Smart: How to Manage Money and a Mortgage

According to a recent Canadian Payroll Association survey, nearly 60% of Canadians don’t have enough money in the bank to cover even one month’s worth of necessary expenses. Too many homeowners are living on the edge of financial disaster, spending money that they should be saving. If you’re finding it difficult to save, now’s the perfect time to reassess your financial strategy, curb your spending, and improve your investment portfolio. Keep more of your money with these saving tips from the mortgage brokers at FamilyLending.ca.  

Saving Strategies for Canadian Homeowners

Saving is easier than you think. All it takes is a little financial knowledge and foresight.

  • Saving Tip #1 – Pay Yourself Saving is simple when you don’t have to think about it. The mortgage brokers at FamilyLending.ca recommend setting up a savings or investment plan that automatically transfers money from your paycheque into your savings account. Not sure how much you should be saving? Start with 10% of your gross income. Whatever amount you choose, make sure you don’t spread yourself too thin.
  • Saving Tip #2 – Get Rid Of Debt Carrying consumer debt can really hurt your ability to improve your savings. Let’s pretend that you’re carrying a credit card charge of $1,000 plus 18% simple annual interest. Every year, you’re paying an additional $180 in interest charges. Pay off that debt and you’ve saved $180. That’s the same as investing $1,000 in something that earns an 18% return after tax. The more debt you carry, the more money you waste paying off high interest charges. Eliminate debt and you’ll automatically save more money.

Save Money on Your Mortgage

Are you paying more than you have to on your mortgage? Refinancing your mortgage could save you thousands of dollars. The mortgage brokers at FamilyLending.ca recommend refinancing your mortgage if:

  • Your mortgage rate is more than 2% higher than current rates, and you have less than 2 years until maturity. Remember to always check with your mortgage holder to determine if there’s a penalty for getting out of your current arrangement.
  • You’ve built up enough equity in your home. The more equity you have, the more likely you’ll be able to refinance and tolerate a floating or variable rate mortgage. This type of mortgage is known for offering lower interest rates, but unpredictable monthly payment requirements. Speak with your FamilyLending.ca mortgage broker to determine if this is an option for you.

Expect Ups and Downs When Investing

It’s no secret that too much risk can hurt your investment portfolio’s growth rate, but so can sticking to ultra-safe investments that pay one percent or less. When reassessing your investments, make sure that:

  • You’re in it for the long haul. Don’t chase every market fad in hopes of making a quick buck. Studies have shown that it’s long-term discipline that provides the highest average returns.
  • You diversify with a healthy mix of stocks and bonds. A good rule of thumb to stick to: the fixed-income holdings in your portfolio should equal your age. This is because as you get older you’ll want to be more conservative in your approach.
  • Know when to sell. The financial experts at FamilyLendingFinancial.ca recommend that no holding should make up more than 5-6% of your portfolio.

Need more help making senses of your money? Then contact the mortgage brokers at FamilyLending.ca. Or our financial gurus at Family Lending Financial are here to help you save.

 

Chantielle Kennedy writer for FamilyLending.ca

Home Inspection Checklist for Canada

 

  • A home inspection by a qualified inspector is a vital step when buying any home. Before committing to a purchase, the homebuyer should hire a home inspector to ensure the home is in proper condition. Except in British Columbia, where licensing is required, home inspectors are not regulated in Canada. If for no other reason than that, it’s important that the homebuyer understands what she should expect from a proper home inspection.

Exterior

  • According to Griffin Home Inspection Services Inc., a Canadian home inspection company, homebuyers can expect a complete inspection of the exterior of the home and its functions. This includes the roof, exterior wall cladding, flashings and trims. It also includes anything else on the outside of a home, including doors, decks, balconies, rain gutters, retaining walls, driveways, patios, walkways, railings and steps. The final written home inspection report to the homebuyer should detail the condition of each of these things. The home inspector should inspect the roof by getting up on it—not from the ground.

Interior

  • The interior of the home, including floors, walls, ceilings, stairs, railings, the garage, countertops, cabinets, doors and windows will be inspected by the home inspector, and the conditions of each should be accurately detailed in the written report. The total time to complete a thorough home inspection is approximately two to three hours, and most of this time will be devoted to the interior and the systems of a home.

Systems

  • Homes are systems, not just walls and a roof. They have intricate components that keep them functioning, safe and healthy for the occupants. Systems examined during a home inspection include mechanical ventilation systems, air conditioning, heating, electrical systems and plumbing systems. If there’s a fireplace in the home, the chimney and flue must be inspected, as well as components of any gas fireplace or wood stove. The conditions of these systems will be detailed on the home inspection report.

Support

  • The support systems of the home will be inspected. This includes both the foundation and the framing of the home.

Repairs

  • The final written home inspection report should explain what repairs need to be made to the home, if any. Home inspectors will not perform repairs themselves. Be wary if a Canadian home inspector recommends a company to perform the repairs. This is forbidden by the Canadian Association of Home and Property Inspectors. An appearance of conflict of interest can place the credibility of the home inspector in question.

Mold

  • Home inspectors in Canada are not required to test for mold. Mold is a frequent problem in homes, and unsuspecting homebuyers risk buying homes that pose serious health risks because of toxic mold lurking in the walls. Most home inspectors in Canada will not pull back carpeting or drywall to check for mold. A 2010 Canadian Broadcasting Corporation investigative report said the company hired five home inspectors to inspect a home infested with mold, and no inspector found it.

Homebuyers wishing to be certain the home they are considering is not infested with toxic mold may need to hire a qualified mold inspector in addition to the home inspector.
Contact FamilyLending.ca for more information.

Home Inspection Checklist for Canada | eHow.com


Step1: Is Homeownership Right For You?

 

 
So, you’ve finally decided to fulfill a lifelong dream and buy your own home
 how exciting! You are ready to fulfill your dream of having a place to call your own.Buying a home is one of the biggest emotional and financial decisions you’ll ever make. Prepare by learning about the process of homebuying and the responsibilities of homeownership. The differences between renting and buying a home are vast, and there’s a long list of pros and cons for both options. And, remember — there is no one best decision for everyone. Before moving forward, though, here are some questions to consider.

  • Do you have the necessary financial management skills?
  • How financially stable are you?
  • Are you ready to take on the responsibility of all the costs involved in homeownership, including mortgage payments, repairs, and maintenance?
  • Are you able to devote the time required for home maintenance?

There are pros and cons for both renting and buying. Everyone must make his or her own best decision. Buying a home is not for everyone. Take a moment to think through the advantages and disadvantages of both owning and renting. Use this worksheet to guide you.

Read over your completed worksheet and then think carefully. Are the advantages of owning your home really bigger than the advantages of renting? Are the disadvantages of owning your own home really smaller than the disadvantages of renting?

If homeownership is for you, you must be both financially and emotionally ready. Buying a home isn’t only about money. You should listen to your heart
 and take an honest look at your lifestyle.

Videos

Take a look at some other people’s experience of homebuying.

 

Source CMHC

Posted By : Robb Nelson  FamilyLending.ca

February 2011 Housing Starts

 

CMHC annouced today:“The seasonally adjusted annual rate of housing starts was 181,900 units in February, according to Canada Mortgage and Housing Corporation (CMHC). This is up from 170,600 units in January 2011.“Housing starts moved higher in February because of increases in Ontario and the Prairies,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “The bulk of this increase was felt in the multiples segment. From last month, multi-family starts were up in Saskatchewan and in Toronto.”The seasonally adjusted annual rate of urban starts increased by 9.4 per cent to 161,000 units in February. Urban multiple starts were up by 14.5 per cent in February to 94,900 units, while single urban starts edged higher by 3.0 per cent to 66,100 units.

February’s seasonally adjusted annual rate of urban starts decreased by 24.7 per cent in Atlantic Canada, by 7.1 per cent in QuĂ©bec, and by 5.9 per cent in British Columbia. Urban starts increased by 29.3 per cent in Ontario and by 26.1 per cent in the Prairies.

Rural starts were estimated at a seasonally adjusted annual rate of 20,900 units in February.

As Canada’s national housing agency, CMHC draws on 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.”
Contact FamilyLending.ca for more information.