Canadian Homeownership Costs-Across Canada

Highlights from across Canada:

from: www.newswire.ca

British Columbia: Homeownership in B.C. is testing household budgets with affordability deteriorating again in the second quarter despite downward pressure on home prices and market activity sinking since the start of this year. RBC’s measures rose between 1.1 and 2.5 percentage points, representing some of the strongest increases among the provinces, and are near all-time highs for all housing categories. Very poor affordability is likely to restrain demand in the period ahead.

Alberta: Affordability measures have improved in Alberta since early 2008 as a result of lacklustre housing market conditions. The second quarter saw a mixed picture with prices easing slightly for condominiums but rising in all other categories. RBC notes that affordability measures are at or below their long-term averages, implying little downside risk to the market and boding well for a strengthening in housing demand once the provincial job market shows more substantial gains.

Saskatchewan: Rising mortgage rates during the quarter caused further deterioration in affordability for most housing types in the province. With the sole exception of townhouses edging lower, increases in affordability measures pushed levels further above long-term averages, indicating that some tensions may be building. RBC expects a strong rebound in the provincial economy this year and next which is likely to help ease such tensions.

Manitoba: Sellers kept a firm hand on pricing by reducing the supply of homes available for sale in the province, resulting in home prices continuing to appreciate, particularly for two-storey homes, which is translating into further deterioration of housing affordability. Homebuyers are feeling more pressure with affordability measures standing close to long-term averages.

Ontario: After setting new record highs this past winter, home resales in the province have since fallen precipitously due to a number of factors including the HST, changes in mortgage lending rules and the rush of first-time homebuyers to lock in low mortgage rates. Housing affordability in Ontario continues to reverse the considerable improvements achieved in late-2008 and early-2009 with measures increasing for a fourth consecutive time in the second quarter, representing some of the largest increases among the provinces.

Quebec: Quebec’s record-breaking housing market rally proved to be unsustainable in the second quarter with resale activity settling to a pace comparable to levels witnessed in 2006-2007, which were considered to be fairly vigorous at the time. Affordability was hampered by home prices trending upward with RBC affordability measures now at or very close to the pre-downturn peaks and exceeding their long-term averages. Further increases in homeownership costs could have a more visibly adverse effect on housing demand.

Atlantic Canada: The East Coast housing market was not immune to the significant downturn in activity that swept across the country since spring with housing resales falling back across the region to the lows reached during late-2008 and early-2009. Cooling demand loosened up market conditions, restraining home price increases and limiting the rise in affordability measures which remain very close to long-term averages. Overall, housing affordability in Atlantic Canada remains attractive and signals little undue stress at this point.

The full RBC Housing Affordability report is available online, as of 8 a.m. E.D.T. today at www.rbc.com/economics/market/pdf/house.pdf.

Winterizing Your Home

Winterizing Your Home Can Save Energy, Money and Inconvenience.

Here’s a checklist of things to do:

• Check your furnace and ducts. Have an HVAC professional inspect your furnace and clean your ducts. Make sure your filter is clean, and change it monthly. If ducts are exposed, insulate them. Consider buying a programmable thermostat.

• Add extra insulation. If you can see the ceiling joists in the attic, chances are you don’t have enough insulation. Either hire a professional or get advice from your local hardware store.

• Find and repair air leaks. On a windy day, hold a lit incense stick near windows, doors, electrical outlets, etc. Seal any leaks. Consider buying energy efficient windows. In the meantime, install storm windows or insulating film.

• Check the roof, gutters and downspouts. Make sure the roof flashing is sound and replace worn shingles. Clean out gutters and downspouts. Install downspout extensions to direct water at least 10 feet away from the house.
• Seal out pests. Rake away debris and edible vegetation from the foundation. Seal any potential entry points. Secure crawlspace and attached garage entrances.

• Prepare your pipes. Insulate exposed plumbing pipes. Drain garden hoses and air conditioner pipes.

• Reverse the direction of ceiling fans. This pulls warm air down into the room and circulates it.

Why Is Your Term Important?

There’s an old saying: “The lowest rate will save you hundreds, but the wrong term can cost you thousands.”

Put another way: your mortgage term can have a far greater impact on interest cost than the up-front interest rate. That’s because your term determines the length of time you’re locked into a rate. That, in turn, affects how long you’ll overpay or underpay, relative to the other available options.

The wrong term can get mighty expensive if interest rates deviate from your assumptions, or if you need to break your mortgage early. It therefore pays to make the right choice from the get-go.

Remember: Almost anyone can find a low rate by browsing the Internet. Picking the right term on the other hand isn’t so easy. Take some time, get good advice, and nail the right term the first time.

Email me to request a list of your term options! (greg@hvmortgages.com)

Excerpt from: Think Like A Billionaire – Mortgage Chapter

Excerpt from: Think Like A Billionaire – Mortgage Chapter

*From the website of Callum Ross

Donald Trump – one of the most well recognized and successful real estate investors and developers world wide – comments on the importance and usefulness of mortgage brokers in his latest book Think Like a Billionaire.

In this book Donald recommends the following for real estate financing advice:

“A good way to get a mortgage is to pass the buck to somebody else. Shopping around and comparing mortgages can be time-consuming, so it may save you time to pay someone to do your shopping for you. Get a mortgage broker, but get a good one. These people are engaged daily in the world of mortgages, which means that they have to know where to get the best rates, who is offering the best conditions, and generally, where it’s advantageous to apply.

“In the long run, you will probably pay less for everything if you get a good mortgage broker, since the broker will know what kind of hidden charges there are and steer you clear of various problems. Not only that, but mortgage companies want to keep in the good graces of anyone who is in the habit of referring business to them. There are certainly technical considerations, such as the length of the mortgage, whether guarantees are involved, conditions of default and all kinds of other things that a mortgage broker and a good attorney will inform you about.”

What You Need to Know About Mortgage Life Insurance

What You Need to Know About Mortgage Life Insurance

Whenever you take out a mortgage you will be offered Mortgage Life Insurance. This is not to be confused with the mortgage insurance that is offered by CMHC, Genworth or Canada Guaranty and is required if you have less than 20% equity in your property. I am referring to insurance that will cover the mortgage in case of death.

Many do not give too much thought about life insurance. Why would you? You are moving into a new home, maybe the first one you have ever owned, which is overwhelming in itself. And the cost….

Well, it is my opinion that you should! Have you ever considered what will happen if something happened to you (death)? Will your family still be able to afford the mortgage payments? Will the kids still have a roof over their heads?

Mortgage Life Insurance coverage would take care of those questions. It would pay out the outstanding balance on your mortgage thus allowing a clear title home to be left behind for your family. They would be taken care of.

Not all Mortgage Life Insurance policies are the same!

Your mortgage broker and the lender will be offering you coverage when signing for the mortgage. These types of policies are easy to get (just sign) and are generally group policies. For those that are too busy and just want coverage this is an easy way to go.

However, I would suggest that you find an independent life insurance agent to provide you with the coverage. Why?

Well, to start they can give you quotes from many different companies. They shop around for you and can probably get you a better deal. Secondly, insurance policies from the lenders only cover you as long as you are a mortgage client. What happens if you transfer the mortgage in the future? The coverage ceases and you will have to buy a new policy. As age is a big determining factor and we all get older, it may cost you more. A policy that is independent of where you bank, work, etc. will provide you with long term coverage without the worry about it ever terminating due to life changes or decisions.

Regardless of where you decide to get your mortgage life insurance coverage, just get yourself covered!