The right real estate agent will help you through every step of buying or selling your home. Like any relationship, you want to ask questions, get to know your agent before agreeing to have them work with you.  Let’s take a look at some of the things you should consider when looking for an agent.

Where to begin when buying a home

When looking for an agent, you want to find an individual who you are confident will listen to your needs and help find a property within your budget.

Before you start your search, you’ll want to determine the maximum price you want to pay.  Keep in mind that there are additional fees when purchasing a home that aren’t included in the home’s price.  These include lawyer fees, moving expenses, and land transfer taxes.

Be Aware: if you put less than a 20% down payment on a home, you will have to purchase mortgage insurance.  Determine the amount you can afford as a down payment, then add in the cost of insurance if necessary when budgeting.

Next, consider where you want to live. Look at property listings within that area and see what real estate companies and agents are present.  While agents can help you buy a property in any neighbourhood, they will be more knowledgeable in the areas in which they are actively selling properties.

Talk To Prospective Agents

Now that you’ve figured out where you want to live and what you can afford, speak to agents to get a better idea of how they work.  How many years experience do they have? Are you able to contact them directly or do they have a team that works for them?  How often will they send you listings?

It’s a hot market, so you want to be confident your agent is getting you in to see properties as soon as possible.  The window for making offers on houses is usually tight, so you want to ensure that your agent can get you the appointment.

Tip: Regularly check real estate listings yourself. You might find a gem that your agent overlooked.

Where to begin when selling a home

If you were happy with the agent you used when buying your home, you’re off to a good start.

If you’re seeking a new agent, start by looking at local properties for sale.  Take a walk or drive around, and check out online sales listings.  Pay attention to whose name keeps appearing, and what companies have good representation.  An individual with multiple listings in a community is probably familiar with the neighbourhood, and most likely getting good deals for their clients.

Be bold in your search: knock on the doors of houses that have for sale signs, and ask the homeowner how their experience has been with the agent.  Most people are more than happy to share their opinions.

Next Steps

Once you’ve found the name of a few reputable agents, take a look at some of their listings online.  Are the pictures attractive? How do they describe the properties? Consider the listings from the perspective of the buyer.  Are they attractive, or would you skip over them? This is the same agent who could be representing you, so you want to feel confident that your home will be presented in the best possible light.

TIP: Pay attention to how long properties have been listed for. If the agent’s properties have been on the market for quite some time, chances are that something they are doing isn’t effective.

Ask prospective agents the same questions you would ask when buying a home. You’ll also want to consider things such as whether or not they like to list the property at a fair market value, or price it under market in hopes of setting up a bidding war?  Do they offer one open house, or multiple times and days? While it’s ultimately up to you to decide which approach works best, it’s good to have an idea of what you’ll be in store for.

Be Advised: When you’ve found an agent, they will require you to sign a listing agreement.  This is a contract that allows the agent a certain number of days to sell your home. If you break this contract by deciding to go with another agent, you will most likely have to pay penalties.

When you’re selling your home, you have a lot of things to consider.  Finding the right agent – one who works both with and for you – can help ease the stress of the experience.

Written by our DLC marketing team!

People don’t always want to talk about home insurance, but when it comes to your house there is no better investment than insurance. But, with the number of insurance products available, it can be hard to know where to start! While it can seem overwhelming, it’s a good idea to get familiar with the basics of some of the required and optional insurance coverage when it comes to your home.

default insurance

The first and perhaps most common form of insurance when discussing the mortgage space is known as “default insurance”. The purpose of mortgage default insurance is to protect the lenders, allowing them to lend money more aggressively.

This type of insurance is mandatory for any home where the buyer puts less than 20 percent down on the purchase. In fact, default insurance is the reason that lenders accept lower down payments, such as a 5 percent minimum, and actually helps these buyers access comparable interest rates typically offered with larger down payments.

In Canada, there are only three companies that offer default insurance: Canada Mortgage and Housing Corporation (CMHC), which is run by the federal government, and two private companies: Genworth Financial and Canada Guaranty.

Default insurance typically requires a premium, which is based on the loan-to-value ratio (mortgage loan amount divided by the purchase price). This premium can be paid in a single lump sum or it can be added to your mortgage and included in your monthly payments.

According to CMHC, the minimum down payment required for mortgage loan insurance depends on the purchase price of the home:

• For a purchase price of $500,000 or less, the minimum down payment is 5 percent.
• When the purchase price is above $500,000, the minimum down payment is 5 percent for the first $500,000 and 10 percent for the remaining portion.

It is also important to note that default insurance (or mortgage loan insurance) is available only for properties with a purchase price or an improved/renovated value below $1 million.

title insurance

Another insurance policy that potential homeowners may encounter is known as “title insurance”. This is an insurance policy that protects residential or commercial property owners and their lenders against losses relating to the property’s title or ownership. In fact, it is so important to lenders that every single lender in Canada requires you to purchase title insurance on their behalf. It is not a requirement to have coverage for yourself, but that doesn’t mean you should dismiss it outright.

Title insurance can protect you from existing liens on the property’s title, but the most common benefit is protection against title fraud. Title fraud typically involves someone using stolen personal information, or forged documents to transfer your home’s title to him or herself – without your knowledge. The fraudster then gets a mortgage on your home and disappears with the money. As the old adage goes: “It’s better to be safe than sorry” and the same goes for insurance.

Similar to default insurance, title insurance is charged as a one-time fee or a premium with the cost based on the value of your property. Title insurance for the lender is typical $250 to $300, while title insurance for yourself runs around $125 to $150. You can purchase title insurance through your lawyer or title insurance company, such as First Canadian Title (FCT).

mortgage protection insurance

Before you sign off on your mortgage, there is one more type of insurance your mortgage broker should tell you about – Mortgage Protection Insurance. Despite being optional, it should still be considered. Almost every mortgage broker in the business has a story of someone who passed on the extra coverage and tragedy hit.

Unfortunately, life happens but it doesn’t have to happen to your home. While you may not want to spend the money now, or maybe you already have some type of life insurance policy through work, don’t discount this option as it is often a blessing in disguise – especially when it comes to homeowners with a spouse and children. Can they carry on with the mortgage payment? If not, they would be forced to sell on top of everything else. For a few extra dollars a month, mortgage protection insurance provides that safety net in the event it is ever needed.

When it comes to choosing a mortgage protection plan, there are a number of different policies available depending on your budget. Manulife’s Mortgage Protection Plan offers immediate insurance and can be canceled at any given time. If you think you may be covered through your work, it can’t hurt to take a closer look at the policy.

Mortgage insurance is what we consider “debt replacement” and life insurance is more fitting as an “income replacement”. This is an important distinction and you should understand the difference. You also need to see just how much you’re going to get through your life insurance policy; you may be surprised just how little it amounts to.

property + fire insurance

Lastly, after you’ve signed off on your mortgage you need to close on the home. Before you do this, your lender is going to require home insurance. When it comes to home insurance, there are many different types of coverage however it generally protects you from damage to the home that is accidental or unexpected, such as a fire.

Home insurance can also cover the contents of your home, depending on your insurance package. For individuals looking at purchasing condos or townhouses, this is especially important! The insurance from strata typically protects the building itself and common areas, as well as your suit “as is”, but it will not account for your personal belongings or any upgrades you made. Be sure to cross-check your strata insurance policy and take out an individual one on your unit to cover the difference.

One final thing to consider with regards to home insurance is that, just because you have home insurance you’re not necessarily covered in the event of a flood or earthquake. Depending on where you live, you may need to purchase additional coverage to be protected from a natural disaster. It’s best to talk to your insurance provider to confirm that you are covered.

At the end of the day, purchasing a home is a huge investment. Why risk it when there are so many great insurance products to ensure your investment – and family – remain protected? Reach out to a Dominion Lending Centres Mortgage Professional today to find out what coverage is needed and how to go about getting it!

Written by Our DLC marketing team!

Everybody wants to live a long and healthy life with time to enjoy their golden years. But while living to 100 years old is a lofty and laudable goal, there may be some unexpected aspects that are worth considering.

Here are some of the good and the bad when it comes to making it to 100.

Pro #1: More time to learn

Learning a new skill is truly one of the great joys in life. And with more time comes more opportunities to pick up skills people often don’t have time for in their younger years. While your first six or so decades might be spent working, raising children, and building a foundation for long-term wealth, you can spend your retirement trying new things. Whether that means learning a new language, starting a new hobby, or volunteering, living to 100 means you can have more time to do what you love.

Con #1: Financial shortfalls

While there are many perks to getting older, and possibly living to 100, people often don’t account for the extra funds needed. Many retirement plans are based on a life expectancy of 85, so it’s important to look ahead at what you’ll need and plan as best you can. Something like a reverse mortgage is a great tool to provide any needed funds for your later years – so you can live your best lifestyle as long as possible.

Pro #2: Seeing family members grow up

While many people plan and expect to raise their children, and even their grandchildren, one of the great joys of becoming a centenarian is the opportunity to meet, raise, and spend time with great-grandchildren. A reverse mortgage offers the chance to provide these family members with an early inheritance, fund their education, or even help them break into the real estate market with money for their down payment.

Con #2: Health issues

It’s hard to make plans around your health, but when it comes to living a long, fruitful life, it’s likely that some health-related issues will arise. And while many people have an idea of what they’ll do if they fall ill, and perhaps have health or critical illness insurance, a reverse mortgage is another option that should be considered. With the average cost of nursing care ranging from $2,000-$10,000 per month, a reverse mortgage can provide the cash flow to cover these costs or retrofit your home to allow you to age in place.

Pro #3: New horizons

Whether it’s traveling to a dream destination or starting a new project close to home, retirement allows many people the time to chase their dreams, but a reverse mortgage can allow you to afford those dreams and tick off your bucket list. Perhaps there is a business you’ve always wanted to start, an organization you’d like to volunteer with, or a dream trip or hobby you want to fund; in any case, heading toward year one hundred means more opportunities to attain your retirement dreams.

Con #3: Aging in place

Did you know 93% of Canadians want to stay in the home they love? To ensure your home stays just as you love it, and to help you maximize the lifestyle you enjoy, unlocking the equity in your home with a reverse mortgage is a great way to continue living your dream life in your dream house well into retirement.

Contact your DLC mortgage broker to find out how the CHIP Reverse Mortgage by HomeEquity Bank can be a viable option to help you live your best retirement!

Written by our DLC marketing team!

In life, things rarely go as planned. This is especially true when it comes to real estate! When it comes to buying a new home, in a perfect world, most of us would like to take possession of our new residence before having to move out of the old one. This makes moving a lot easier and allows you time for painting or renovations prior to moving into your new digs. Unfortunately, this is where things get complicated.

Most people need the money from the sale of their existing property to come up with the down payment for the new house. This is where bridge financing comes in. Essentially, bridge financing allows you to ‘bridge’ the financial gap between the firm sale of your current home and the firm commitment to purchasing your new home.

WHAT ARE BRIDGE LOANS?

Bridge loans are short-term solutions that range from 90 days to 12 months, with an average of six months in length. This type of financing allows you to access some of the equity in your existing property, to put towards the down payment of your new home. However, to be eligible for a bridge loan, a firm sale agreement MUST be in place on your existing home, meaning all subjects have been removed. You will also require a purchase agreement for the new home to verify the amount required.

If you have not yet sold your home, you will not be eligible for bridge financing as the lender needs that to accurately calculate how much equity you have available and if you can afford your new home.

If you are currently looking to sell, or are in the midst of selling your home and considering bridge financing, it is important to understand that unless you can qualify and pay for two mortgages, you should always sell your existing home before purchasing a new one. There are a couple of reasons for this:

• Property values ​​are constantly changing. You won’t know how much money you have until you sell your home as a home is only worth what someone is willing to pay for it NOW. Past sales and future guesses don’t count!
• You need the proceeds from your existing home to help pay for the down payment on your new home, as well as renovations, moving costs, and (if required) the size of mortgage you qualify for.

However, if you have a firm sale and purchase agreements in place and are adamant about bridge financing, there are some things you should know.

getting bridge financing

If you have sold your existing home but the closing date comes after the closing date of the new property you just purchased, then bridge financing will likely be your best option.

Remember – in order to qualify you must have a firm sale agreement for your current home and a purchase agreement for the new home. If you don’t have a firm selling date you may need to consider a private lender for the bridge loan.

If you do have a firm sale and purchase agreements and want to move forward with bridge financing, you also need to consider the lender. Your new lender may not allow for bridge financing as not all lenders do. It is important to consider whether or not you think you need bridge financing so you can ensure you sign with the appropriate lender. Utilizing a Dominion Lending Centers mortgage broker can help you find a lender that provides the options you need.

COSTS OF BRIDGE FINANCING

It is important to mention that bridge financing typically costs MORE than your traditional mortgage. It is best to expect the Prime Rate plus 2, 3 or 4 percent, plus an administration fee.

Also, in some cases, if you require a loan over $200,000 or a loan for more than 120 days, your lender may register a lien on the property until the loan is repaid. In order to remove this link, you will need to consider the added costs of paying for a real estate lawyer.

PRIVATE FINANCING

If you have purchased your new home and are closing the deal, but your existing home has not yet sold, you would not qualify for bridge financing and would therefore need to consider a private loan.

Private financing is expensive, but it is generally a more affordable option versus lowering the asking price of your existing home and losing out on tens of thousands just to sell quickly. Seeking out a specialized mortgage broker who has access to individuals that lend money out privately to get the best rate and terms available to you.

COSTS OF PRIVATE FINANCING

Private loans are dependent on having enough equity in your current property to qualify and are more expensive than traditional mortgages. Private loans have a much higher interest rate than traditional mortgages, which averages anywhere from 7-15 percent. The costs associated with a higher interest rate are in addition to an up-front lender fee and potential broker fee. These amounts will vary based on your specific situation with consideration to the time required for the loan, the loan amount, loan-to-value ratio, credit bureau, property location, etc.

When it comes to bridging financing and selling and buying of your home, don’t waste your time trying to figure it out on your own. Give a Dominion Lending Centers mortgage broker a call and we can help you determine your best option!

Written By Our DLC Marketing Team

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 you 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 that 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.

Witten By Our DLC Marketing Team