first class homes

Warmer Weather Keeping Housing Starts Strong

2006-03-27T12:47:00.000-08:00

January and February have been good months for the house-building industry. CMHC says that new home construction in urban areas is at its second-highest level since 1948.

Alberta and British Columbia had housing starts up 19% and 23% respectively. However, starts are expected to drop to between 208,000 and 209,000 for the year, which is less than the 225,481 for 2005.

While housing starts are up, the number of people saying they will be very likely to buy a home in the next two years is 10%, down from 13% a year ago, according to a Royal Bank report.

In Alberta and BC, this seems a bit shocking, since the only thing hampering the market is the shortage of supplies and labor.

Dr. Sherry Cooper, a chief economist with BMO Nesbitt Burns, says that: "While we look for housing activity to temper this year, the report indicates that the sector is still robust. A solid employment picture and still-low borrowing costs will maintain the momentum clearly evident in this sector, but at a slower pace."

You can read the full article from the National Post, March 9, 2006 edition. Article title, "Warm Winter Gives Housing Good Start", by Garry Marr.

Cemeteries Make Good Neighbors

2006-02-22T12:01:00.000-08:00

According to a Financial Post article in the February 21, 2006 edition, entitled "Cemeteries Big Draw for Condos", people in Toronto are willing to pay 15 to 20% more for a view of a cemetery.

Apparently, people are considering it a bonus to live next to a cemetery. They know they will have quiet neighbors, and that nothing will ever be developed on top of the cemetery, thus ensuring their peaceful and tranquil setting and views. People in Toronto treat the cemetery as a "park-like setting".

According to Ms. Lewis, whose firm was involved in the sale of the condo units in Toronto near Park Lawn Cemetery, "There are few people who don't think overlooking a cemetery is a plus." "We sold out the cemetery side months before the street side. The cemetery side is magnificent."

I personally agree with Ms. Lewis. Cemeteries can make good neighbors and ensure long-lasting great views. Of course, I don't believe in superstitions either.

BC Home Owner Grant Increases

2006-02-05T09:57:00.000-08:00

Now owners of property assessed up to $780,000 will be eligible to receive the full $470 home owner grant. This is up from $685,000 in 2005.

The grant is reduced $5 for each $1,000 of assessed value over $780,000. The new phase-out level is $874,000.

This means 27,000 more homeowners will receive a full grant, and will cost the province an estimated $5 million a year.

This increase is the third year in a row that the Real Estate Board's Government Relations committee has effectively lobbied for this increase.

For more detailed information about the Home Owner Grant go to: www.rev.gov.bc.ca/hog

Vancouver Housing to Rise 4.8% in 2006

2005-12-30T16:28:00.000-08:00

The forecasted average house price for 2006 by the National Post is $445,000. This is up from $424,536 (Jan. to Nov. 2005).

The big increases are expected in Montreal and Quebec City for 2006, the only two cities with double digit expected increases.

The article states that the housing activity will slow next year without collapsing.

Michael Polzler, Exec. VP, Re/Max Ontarior-Atlantic Canada states that "interest rates could climb as much as two percentage points before we see any real impact on the housing market."

So those of you waiting for the bubble to burst had better act now. No bubble bursting is expected in the near future, just further increase in prices. Waiting will price you out of the market. I've seen it happen too many times to count in 2005.

Shrinking Lots

2005-12-30T16:26:00.000-08:00

December 29, 2005, National Post article states that due to rising land values since 1970, lot sizes have been shrinking.

The article goes on to say, "according to housing experts, by the end of the decade Canadian homes, especially in major urban centers, will be bigger and have more amenities on the inside, but the backyards may be tiny."

Frank Clayton of Clayton Research, states that city planners are promoting more compact lots. Even though lots are shrinking, more home is being squeezed on to that lot. This trend is happening almost soley in large urban centres like Vancouver, where population growth has outpaced that of the country as a whole.

This population growth, along with an ageing population has created a large demand for multiple density housing; i.e. condos. The Canadian Home Builders' Assoc. states that condo starts made up 30% of all housing starts as of last year.

It appears that owning a house on any size lot in major metropolitan areas is going to be a luxury for most. For those of us in the "X" generation, the idea that we don't have a backyard is still hard to comprehend. We grew up in our backyards and roaming the neighborhood streets. Unfortunately, roaming the streets without adult supervision has become an oddity for a whole different reason than no longer having a backyard!

Condo Speculation

2005-10-17T21:26:00.000-07:00

Across Canada, new construction hit a 17-year high in 2004, and this year's numbers are expected to be very close.

Canada Mortgage and Housing Corp. says we'll continue to see more than 200,000 new dwellings built on an annual basis into 2007. That's about 20% to 30% more than we need, based on demographics. You can chalk up much of that extra demand to investors hoping to cash in on the condo craze.

Real estate experts such as Derek Lobo, a condo consultant, estimate that up to 20% of condos under construction are being bought by investors (about 12,000 per year). In Vancouver, the condo capital, condo units account for 2/3 of new starts.

Most worrisome is the proliferation of buyers who purchase small units on lower floors, ultimately as rental properties. "Those are the cheaper units," says Mr. Lobo. "There's going to be an overflow of apartments that come on to the rental market."

The crash is already here, he maintains, pointing out that rental prices for high-end apartments have plummeted. "They have absolutely come down," he says.

Mr. Lobo sees a scenario building in which investors won't be able to cover their costs--including mortgage payments, condo fees and taxes. He predicts a degree of panic when all the condo investors buying unfinished units today try to rent them.

Mr. Maoschini, a 35-year old civil engineer, who has invested in condos just can't see prices dropping in the Lower Mainland. "Vancouver is eventually bound to become the New York of the West Coast. Maybe it will slow down a bit--10% maximum--but it's not going to crash like they say."

Really? Take a look at what happened in Vancouver about 10 years ago. The average selling price of a home there peaked at $307,747 in 1995 and dropped to $278,659 three years later. It wasn't until 2003 that the 1995 peak was surpassed, and that's not counting inflation.

As in this case, what goes down, does go back up, it is all a matter of whether you can afford to ride the downward spiral long enough to get back on top.

From what I am seeing in the market as a realtor now, there seems to be a "throw caution to wind" attitude among buyers. I have seen properties sell for amounts I didn't think possible. There seems to be no lack of uneducated buyers out there trying to navigate the real estate market, and the sellers are cashing in! The market has picked up to the frenzied pace it was earlier this Spring. Condo units I sold in a complex this Spring, are now selling for $25,000 more and they aren't even as nice as the one I sold in the Spring. The crazy thing is, people are buying them and thinking they got a great deal.

I have seen buyers who should have bought last Fall or early this Spring, but didn't and are are still looking. They have been priced right out of the market. They now can no longer afford the same unit they could have purchased this past Spring. So, can you afford to put off buying? At this moment, it would appear not.

This information (other than the last 3 paragraphs) was taken from the article, "Condos: Boom fated to Bust?", October 5, 2005, National Post.

No Money Down Mortgages--Wise or Risky?

2005-10-17T20:41:00.000-07:00

Earlier this month, the National Post ran a week long special of reports on the real estate industry and markets. This summary is from the article entitled, "No Money Down; Big Risk in Future", dated October 5, 2005, by Lori McLeod.

Some would consider the 100% mortgage the ultimate speculative tool for getting into the real estate boom. They are banking on the fact that housing prices are going to continue rising.

According to Paul Mims, VP of CIBC Mortgages, "...housing prices are only up in a strong economy. Just around the corner they could drop, and you're going to have to pay it all back." He goes on to say the product might work for one of the target markets cited by advertisers--young professionals like doctors and lawyers who have great credit and strong income potential, but also have big student loans and no savings.

According to Vince Gaetano, Sr. Mortgage Consultant with Monster Mortgage, few people in this category are actually going for no-money-down mortgages. It works more for those people trying to keep up with the Joneses.

The drawback with this type of product is the big premium associated with it. On a $300,000 home, a person taking on a 107% mortgage (the 7% is for closing costs), would pay an average of 5.9% interest on a 3-year fixed mortgage. That compares to a rate of 4.25% to 4 .5% for a customer with a 10% down payment for the same term.

Given this scenario, based on a bi-weekly mortgage payment and a 25-year amortization, and interest compounded semi-annually, the principal and interest paid works out to:

107% mortgage: Paid off $18,658.23 of principal and paid $54,496.76 in interest.
10% down at 4.5%: Paid of $18,884.42 of principal and paid $34,913.15 in interest.

The 107% mortgage pays $544 a month more in interest for the same home, and at the end of 3 years, their mortgage will still be $2500 more than the price of the home. This will be a costly loan if home values decline.

However, there is a lower forfeit rate on higher-borrowing mortgages. This is attributed to a more rigorous screening process to qualify for the loan.

The low-rate environment, combined with soaring hydro and energy costs, could definitely get homebuyers with no cushion into trouble, says Mr. Gaetano. "There's no wiggle room in houses. My income's not going up 30% like the cost of these staples." In his opinion, part of the blame falls on Canada Mortgage and Housing Corp., which "isn't responsible enough to look at revising qualifying ratios at times like this."

High-borrowing mortgages aren't intended for people looking to flip a house quickly for profit, says Mr. Goode. But they are a good option for young professionals, students who live in the dwelling (up to a four-plex) and rent the other units for income, or newly divorced people with good credit but depleted savings after splitting up their assets.

For the truly house-hungry who have no savings, Mr. Gaetano says they'd be better off to exercise a little patience and reap the rewards of putting something down on their homes. He leaves investors with a final thought to chew over when mulling a 100%-plus mortgage: "It's never no money down. It's a transaction that feeds a lot of people--realtors, bankers, appraisers, everybody else except you."

July Real Estate Statistics

2005-09-08T15:32:00.000-07:00

Greater Vancouver's residential housing market reamins brisk this summer, with demand continuing to outpace supply, as it has done for much of the year. While year-to-date sales increased 5.1 percent, year-to-date residential housing listings decreased 8.4 percent, representing approximately 3,000 fewer homes on the market this year compared to the same period in 2004.

According to the MLS, sales of attached properties increased 33.4 percent, with 647 units sold in July 2005 compared to 485 units sold the same month last year. According to the Board's Housing Price Index (HPI), the benchmark price of an attached property reached $336,343, up 10.8 percent from 2004.

Sales of apartment properties increased 18.6 percent in July 2005 to 1,567 sales, compared to 1321 sales in July 2004. The benchmark price of an appartment property in Greater Vancouver is $267,814, up 16.5 percent from one year ago.

Sales of detached properties in July 2005 totaled 1,438 units, and increase of 18.5 percent compared to 1,213 sales in July 2004. The benchmark price of a detached home increased to $539,815, up 11.8 percent from a year ago.

Why Use A Realtor

2005-09-08T15:11:00.000-07:00

In this age of instant information through the internet, I know, as a realtor, I find many buyers and sellers feeling like they have no need for a realtor. They feel they are qualified to locate the listings and do their own negotiations. For some, that may be true, but I don't find that true for many others.

Here is a list that the Greater Vancouver Real Estate Board compiled on why you should use a realtor.

When dealing with large sums of money, and real estate is one such transaction, do you generally use people skilled in that area of expertise? Would you deal with a legal issue of $100,000 or more without a lawyer? Would you handle a tax matter of $100,000 without a CGA? Why is it then that you will go without a realtor in a transaction many times that size?

Ten reasons for a realtor:
1. Efficient handling of the paperwork for a sale.
2. Knowledgable with trends, assessments, future development, zoning, etc.
3. Recommend other professionals needed in a real estate transaction, such as lawyers, insurance agents, movers, home inspectors.
4. Help you consider properties based on your lifestyle needs.
5. Information about the community where you plan to buy; such as schools, shopping, etc.
6. A realtor will help you stay focused on what you can afford and where your buying power will benefit you the most.
7. Network of other realtors to get you into properties quickly.
8. A realtor can save you time by matching properties to your needs and in your budget.
9. Realtors help take the stress out of the transaction and help you negotiate.
10. Realtor is committed to you. They have a legal obligation to uphold the integrity of their client, and protect and promote your interests.

Feel free to go it on your own, but when you are ready to call in a professional, give me a call (604-435-9477), or visit my website at www.sandraenriquez.com.

Credit Ratings--What Do They Mean?

2005-08-09T10:20:00.000-07:00

In a recent article from Canada.com News, by Michael Kane of the Vancouver Sun, he shares what credit ratings mean for you and how they affect your ability to borrow money.

You can order a free guide on how to obtain and interpret your credit report and credit score from the Financial Consumer Agency of Canada, at 1-866-461-3222, or visit www.fcac.gc.ca.

Your file, must, by law be accurate, and you must be given a chance to review and correct your file. Your file has room for a consumer statement which you can use to explain a particular situation; such as, a dispute with a financial institution.

Your credit report not only tells whether you have paid your bills on time, written bad cheques, been referred to a collection agency, filed for bankruptcy, etc., but also lists who has inquired into your credit history.

Financial advisors say it is a good idea to check your file once per year, or after a major event such as a death of a spouse or divorce, and before you apply for a large loan.

A scale from 300 to 900 (higher scores meaning less risk to the creditor) is used to determine your creditworthiness. This scale tells you where you rank in relation to other Canadians.

Here's the precentage breakdown on scores:

Up to 549: 4%
550 - 599: 4%
600 - 649: 6%
650 - 699: 11%
700 - 749: 19%
750 - 799: 27%
800 - 849: 24%
850+: 5%

Here's the precentage breakdown on delinquency rates based on those same scores:

Up to 499: 78%
500 - 549: 60%
550 - 599: 39%
600 - 649: 23%
650 - 699: 12%
700 - 749: 5%
750 - 799: 2%
800+: 1%

Source: Equifax Consumer Services Canada

In the largest block, a rating of 750 - 799 (27%): it is unlikely a credit application will be turned down, most lenders consider offering you attractive rates, many lenders will provide you with instant approval.

If you haven't done so in a long time, or ever, now is a good time to check your credit report. You can obtain one on-line (with a credit card for payment) from Equifax or TransUnion.

CMHC Premiums to fill Ottawa's Pockets?

2005-07-29T15:02:00.000-07:00

Tax payers and homeowners should pay particular attention to the article in the July 29, 2005 edition of the National Post, entitled Mortgage insurance: Ottawa's tax bonanza.

Over the next 4 years, there is a strong likelihood of a $4.5 billion surplus at the Canadian Mortgage and Housing Corportation (CMHC) . Given that CMHC is a federal Crown corporation, the surplus belongs to Ottawa. Currently, it is being fought over by the Liberals (who want it in general revenue), and the Bloc & NDP who want it for pet projects. Do you want the premiums you paid to get your mortgage (a downpayment of less than 25% incurs the CMHC premium, which is added to your mortgage balance) to go to general revenue (or a pet project)?

The mortgage insurance premiums are paid to protect lenders in case of mortgage default on high ratio loans. For example, a buyer purchasing a $300,000 home with a 5% downpayment will pay nearly $8,000 in mortgage insurance premiums to CMHC. This equates to an additional $6,000 in interest to the bank on a 25-year amortization and a 5% interest rate.

Last year, CMHC took in $1.1 billion in premiums, and paid out only $51 million in default claims. CMHC reported a profit of $875 million last year. I'd be overjoyed to earn a 1/2 of 1% of that amount over the next 4 years!

Given this, what CMHC has done is turn home buyers into a brand new tax base for Ottawa. These home buyers are usually the first-time home buyers who are struggling to get into some of the really hot markets right now, and can ill afford the premiums being charged. However, since the premium is hidden in the mortgage amount, few even realize they are being "taxed".

If you have paid CMHC premiums, perhaps you should contact your MP and tell them you want a rebate on the overpayment of premiums for your insurance.

The article in the National Post was very entertaining, and gave some examples of what different parties want to do with that money. It is worth the read. Thank you Peter Shawn Taylor for bringing this to our attention!

Are Interest Rates on the Rise?

2005-07-11T11:27:00.000-07:00

This information is from the National Post, July 11, 2005 edition.

The Article is entitled "Dodge Readies to Sound Alarm Bell", by Jacqueline Thorpe, please refer to it for full details. The following is my summary.

Interest rates have been holding at a 40-year low for the past year and a half, and tomorrow we find out whether or not the Bank of Canada plans to start putting the clamp down on the borrowing binge we have experienced during this period.

David Dodge, the bank governor, will also divulge his thinking on the economy at a media conference on Wednesday.

An interest rate hike most likely won't happen tomorrow, but many are looking for the bank to begin to make the move for a hike this September/October. By year-end, the majority of analysts see rates increasing by at least 1%.

The article goes on to talk about various other economic factors, such as our low unemployment rate, high canadian dollar, and inflation rates expected to climb 1% to 3%. The one factor that is still up in the air is how the different world economies will react, as each country has business cycles that vary in length.

For more information, read the article and watch the news tomorrow.

Risk To Housing Market "Exaggerated"

2005-06-01T15:11:00.000-07:00

Based on a report from TD Economist, Carl Gomez, as printed in the REM June 2005 issue.

Many have been predicting an end to low interest rates and a crash in house values for years, but Gomez states that there is NO housing bubble on the horizon, and buying a home is still a good long-term investment.

Gomez's report titled, Bursting Aspects of the Housing Bubble Myth, says one of the key tenets of a housing bubble is speculative buying, and that's just not happening in most markets.

While a modest cooling is in the cards this year and next, there are a number of misconceptions about the state of this housing market and where it's going.

Report says one misconception is that recent homeowners who entered the market when interest rates were low, will be deeply hurt when rates rise. Gomez states that most homeowner's are already insured to some extent against the risk of rising rates since their mortgage payments would remain fixed over the term of their mortgage.

With current economic conditions, the risk of an intense interest rate shock is quite low, given Canada's currently benign inflation environment. Core consumer prices, which exclude the volatile effect of food and energy prices, continue to sit just below the midpoint of the Bank of Canada's inflation target and inflation expectations remain well contained. As a result, rates will rise at "a measured pace" during the next few years, avoiding the kinds of spikes from the 1990s.

Gomez says another poplular housing myth is that the condo market is becoming overbuilt, expecially in Toronto and Vancouver. He doesn't see it that way.

"Higher land prices in places like downtown Toronto and Vancouver put a premium on the price of single-detached housing in these areas," Gomez says. "But condos keep homeownership accessible to many potential buyers...who are drawn to urban areas, but are most constrained by affordability."

Traditionally, condo developments have had a volatile pattern of over- and under-building, but the home building industry has instituted a number of risk management techniques such as pre-selling prior to construction. "As a result, today's backlog of complete and unoccupied condos remains broadly manageable in Toronto and down-right tight in Vancouver," says Gomez. So even if demand suddenly cooled, the risk of a supply overhang would not be as great as previous cycles."

Another theory he bursts is the one that says baby boomers will place too many homes on the market for the younger generation to absorb as they retire. Two problems with this assertion according to Gomez; 1. Not all boomers are the same age (span in age from 39 to 60), 2. They are the fastest growing segment of homeownership (ages 65+).

While older boomers are pondering retirement, there are just as many boomers with younger families still thinking about trading up to larger homes and are not even thinking of retiring until 2020.

Aging boomers are likely to reshape the types of housing that will be in demand over the next two decades, but they are unlikely to cause a deep correction in prices, Gomez reports.

Given that there is no coming crash in real estate markets and only a modest cooling, housing should remain a sound investment, the report concludes. Assuming that the market remains fairly balanced and the economy grows moderately, TD expects home prices to grow at an average annual pace of about 3% over the next decade.

Stagging Your Home Part Two

2005-05-16T10:11:00.000-07:00

In a previous blog, I mentioned the new trend and importance of stagging the inside of your home for sale.

In this blog, I am going to talk about the importance of stagging the outside of the home; i.e. curb appeal.

The biggest and least expensive improvement you can do outside, is to make sure the lawn is mowed, trimmed and weeded. Make sure it is watered and fertilized so there are no brown patches. In water restricted areas, your lawn should at least look the best (or least brown).

Flower beds should include a variety of flowers as well as a balance between perennials and annuals. Borders and mulching is also an important feature. Mulchs add color and texture to your flower beds, and helps to prevent the spread of weeds.

If you don't have flower beds, or live in a condo, you can add a lot of punch by placing potted flower boxes and fresh cut flowers around the unit and on balconies, or other outdoor areas.

Water features should be clean and in good working order. Other items, such as decorative stones, bird baths, and other visually stimulating yard pieces will add interest and attractiveness to your home.

Many potential buyers judge a homes interior by what the exterior looks like. A well maintained, attractive yard indicates pride of ownership and suggests that the inside of the home is well-maintained as well.

When selling in winter months, have pictures of your garden during Spring and Summer out for buyers to look at. Providing information on how to maintain the plants and shrubs you have in your yard to the new buyer is also a very nice gesture.

The benefit to spending that little extra time planting and weeding will be seen in your final price, according to Ron Rossini, a 23-year real estate veteran and member of Ontario's Master Gardeners.

CMHC Lowers Mortgage Loan Insurance Premiums

2005-04-26T11:42:00.000-07:00

New lower rates are effective immediately.

Now those who only have a 5% down can pay less in the insurance premium for their loan.

Old Rate for a loan to value range of 90.1 - 95% was 3.25%.
The New Rate is 2.75%

On a 200,000 mortgage, that is a savings of $1,000!

With interest rates low, and these changes to the CMHC insurance premium, and increases in the cap for property transfer tax exclusions, those at the entry-level end of the market have been given a boost to enter.

Pay Your Mortgage Off Faster

2005-04-15T13:46:00.000-07:00

Based on a chart provided by TD Canada Trust, assuming a 6% interest rate, there are some ways to save money on interest and pay off your mortgage faster without putting a huge strain on your bank account.

1. Increase frequency of mortgage payment. If you are paying monthly, switch to a biweekly payment. This has the effect of saving you 4 years and 1 month's worth of payments over the life of your typical mortgage.

2. Increase payment options; by making a slight increase over your regular payment amount each month, you can save in interest costs and pay the mortgage off faster.

3. Take advantage of lump-sum payments if a regular increase on your monthly payment is too hard to manage. Even a 2% lump-sum payment will take years off your mortgage.

4. Shorten the amortization period of the mortgage. In the example provided, going from 25 years to a 20 year period saved almost $21,000 in interest on a $100,000 mortgage (and only increased the mortgage payment by $72.38/mo.). A 10-year period, saved just over $59,000 in interest, and required an additional $466.70 per month.

As you can see, even a small change can save thousands and take years off the life of your mortgage.

Fixed or Variable Rate Mortgages--What's Right For Me

2005-04-15T13:25:00.000-07:00

Based on information provided by TD Canada Trust's Spring Mortgage Guide, here are some things to consider when deciding on what type of mortgage to get.

1. Do you take comfort in knowing you have a specific interest rate for a predetermined number of years, i.e. predictability?

2. Are you comfortable accepting a little risk with the hope of a lower overall cost of borrowing?

If you answered yes to question 1 and no to question 2, then a fixed rate mortgage is right for you.

If you answered yes to question 2 or are interested in finding how much you can save, then pursue the variable rate mortgage option.

There is a misconception that with a variable rate mortgage, that your payment will fluctuate. That isn't true. Your payment generally remains fixed, it is just that a smaller or larger portion of your payment will go to interest rather than to principal repayment depending on which way the interest rate is going. Historically, variable rate mortgages have had lower interest rates than fixed long-term mortgages.

The first step in any decision is to speak to an expert. Call your mortgage specialist at your bank, or get a referral from your realtor or financial planner of a good mortgage broker.

Financial Advice Not Sought by Homebuyers

2005-04-06T14:20:00.000-07:00

According to a recent survey done by Decima Research for BMO, 77% of first-time homebuyers did not seek financial advice on their purchase. Of those who did, it was from family and friends rather than financial planners and mortgage brokers.

Maria Racanelli, vice-president, personal banking at BMO said, "What's surprising about these findings is the number of people who don't seek financial advice from experts on the biggest investment they'll ever make, and that could be a big mistake." "Developing a realistic plan on how to manage both your regular payments and unexpected expenses often makes a huge difference in maintaining a comfort level about your overall finances."

Those who did obtain financial advice from an expert, were more likely to agree that their home payments are a small and manageable portion of their household income than those who did not.

This begs the question, why would you not get expert advice? It is like taking your taxes to a designer. The designer can write the numbers creatively and attractively, but if they don't know where to put them or how to deduct them, you only wind up paying more than you should!

I have people tell me all the time that they have talked to friends or family members about a big decision, and then they ignore the experts advice. Many times, in hindsight, they wish they had listened more to the expert and less to their friends. Don't let it cost you more than you can afford. Be smart with your money.

Need a financial advisor: contact Joseph Enriquez at Jems Financial Group, 604-537-0524 or email at jenrique@telus.net.

Need a Mortgage Broker: contact Suzie West at Meridian Financial Services, 604-520-3635 or email at mortages@suziewest.com.

This information was taken from an Investment Advisor Forum.

2005-04-06T14:19:00.000-07:00

Bringing Color to Your Dreams!

Mortgage Insurance--Whose Really Protected?

2005-04-06T13:32:00.000-07:00

Does mortgage insurance really protect you or the lender? It is worth your time to do some investigating.

Below is a comparison of the differences between your own personal term insurance and the mortgage term insurance that is offered by most lenders.

Mortgage Insurance:

You don't own the policy, you are part of a group policy owned by the lender, with the lender as the beneficiary. Your family will never receive the proceeds, and cannot use the funds for any other option. The payment is made directly to the lender.
The coverage isn't flexible as you can only be insured for the amount of your mortgage, you can't alter, renew or convert the policy. You can't transfer the policy to another lender, and your coverage ends when the mortgage ends or is paid off.
Your premiums and benefits are not guaranteed. The lender can change the policy or cancel the policy at any time. Rates on mortgage insurance are adjusted every 5 years. So whether you renew your mortgage or not, you will have your rates adjusted to reflect your current age.
You have no control over your rates. If you don't smoke and are in good health, you don't qualify for a discount in your rate. Since it is a group policy, you pay what everyone pays, good health or not.
Underwriting of mortgage insurance is often done at the time a claim is made. In otherwords, if the insurance carrier deems you had a condition that would normally have prevented you from obtaining insurance when you purchased your mortgage insurance, they could deny your claim.

Personal Term Insurance:

You own the policy and you decide who the beneficiary will be.
You choose the options, amount and length of coverage you want. You can increase or decrease your coverage, renew it or convert to permanent protection at any time. Your coverage doesn't end when you pay off your mortgage or sell your home.
Upon death, the benefit goes directly to your beneficiary and they decide how to spend the money, not your lender.
Your premiums and benefits are guaranteed for the life of your policy. Only you can cancel or make changes to your policy.
The amount you pay for coverage is based on your age, health, and smoking status at the time you apply for it. Underwriting is done at the time of application, so they can't decide later on to deny coverage unless you willfully lied about your health.

Before you sign up for mortgage insurance, disability or critical illness coverage, talk to an insurance broker.

Need one: contact Joseph Enriquez, of Jems Financial Group, at 604-537-0524 or email at jenrique@telus.net.

How Desparate Are You For A New Home?

2005-03-28T16:46:00.000-08:00

Apparantly, desparate enough to camp out for a chance at a home costing $500,000!

In Port Moody's Heritage Woods neighborhood, Parklane is building 46 new single-family detached houses. These are priced from $457,000 to $499,000 and are 3 bedroom with approximately 1650 to 1780 square feet of finished space.

My how Port Moody has changed! However, given the park-like settings and the fact that you don't have to go over bridges to get into Vancouver, it apparantly has what people are looking for.

To read the whole story see Vancouver Sun, March 26, 2005 edition.

Vancouver is #2

2005-03-24T13:53:00.000-08:00

For those of us living here, we may or may not understand why Vancouver was rated number 2 in the world for quality of life. Which side you fall on I'll leave up to you.

This year we tied with Vienna, and at the top were Geneva and Zurich.

Other Canadian cities faired well also; Toronto, Ottawa, Montreal and Calgary all made the top 10. All five cities came in sixth for the safety list, the only cities in North America to do so.

Safety ratings are based on internal stability, crime rates, the frequency of terrorist attacks, the quality of law enforcement, and the degree of personal freedoms.

What should come as no surprise is what city came in last...Baghdad.

This information comes from a survey done by Mercer Human Resource Consulting, and as reported in the National Post, Monday, March 14, 2005 edition.

First Time Buyer Seminar

2005-03-24T13:46:00.000-08:00

The Greater Vancouver Home Builder's Association is hosting a FREE seminar for first-time buyers.

Details: April 5, from 7 - 9 p.m., at the Guildford Sheraton Hotel Ballroom, 15269 - 104th Ave., Surrey.

Pre-registration is required, so call 604-588-5036 from 8:30 a.m. to 5 p.m. Monday to Friday. You may leave a message over the phone on weekends to register as well.

Over 800 people attended this seminar last year, so call right away!

Rising Loonie Boon to Real Estate Market

2005-03-16T10:55:00.000-08:00

A report from CIBC World Markets entitled, "Loonie Boom: How the Soaring Dollar is Sustaining the Canadian Housing Market", states how the rising loonie is causing the boom in the real estate market.

The rising loonie over the last 2 years has kept interest rates at all time lows, leading to inexpensive credit.

CIBC estimates that 5-year mortgage rates would be 7% if not for the loonie's gain. Currently, big banks are offering 6%, 5-year rates, and other sources are below 5%.

The strong loonie and stabilized mortgage rates have helped boost real estate prices by an additional 9% in 2004, says Benjamin Tal of CIBC World Markets.

Lower interest payments due to mortgage refinancing saved the average household $1900 last year, an equivalent of a 3% increase in average household income.

The ability to refinance at lower rates has allowed homeowners the ability to put more money back into their home, as indicated by the increase in renovations.

Haven't taken advantage of these great interest rates? It is not too late to contact your mortgage provider or your neighborhood realtor.

First-Time Buyers Tax Break Update

2005-03-05T10:07:00.000-08:00

B.C. first-time buyers have finally received an increase in the amounts of property tax exemption limits. Now homes purchased up to $325,000 will be free from property transfer tax if you are a first-time buyer (never owned property anywhere in the world). A proportional tax exemption is available from $325,000 to $350,000.

Maximum mortgage paydown limits in the first year have been increased to $13,000.

Good news on the property tax side too. The basis homeowner grant is now available on homes valued up to $685,000. The grant is phased out by $5 for every $1,000 in value over $685,000. It is completely phased out for homes valued at $779,000 ($834,000 for seniors).

It is great to see that the government is recognizing that limits were not in line with today's market, and have taken the necessary step to help close the gap.

Rates To Go Down

2005-02-10T20:05:00.000-08:00

As of February 11, 2005

According to Sutton Mortgage Corp., the predictions by the experts are that interest rates will go down. The expected bank prime rate will be 4% by mid-year and remain there until the end of 2005.

Current Rates For Sutton Mortgage Corp.:
Variable 3.5%
1 yr.; 3.70%
2 yr.; 4.0%
3 yr.; 4.39%
4 yr.; 4.57%
5 yr.; 4.70%
7 yr.; 5.07%
10 yr.; 5.45%

Bank rates are at least 1% or more than Sutton's posted rates, and at the 7 & 10 year range they are higher by 2% or more.

Feng Shui Homes

2005-02-06T17:38:00.000-08:00

This information is from an article in "GLV", September/October 2004 edition, by Rodika Tchi, MSC.

In the article, the author states that "the right application of feng shui balances, heals and re-energizes any given space...thus improving the health and well-being of the people who inhabit the space."

Things to Avoid:
Straight walkways to the front door
Front and back doors aligned
Bathroom facing front door
Stairs close to front entrance
Bedroom over garage or kitchen
Bathroom door facing kitchen

Things to look for:
Curved pathway to front door
Good "landing" space at front entrance
Open center of house
Harmonious flow of energy
Good backing for the house
Amount of natural light
Water features

In addition to these items mentioned in the article, a few I have learned from a client (to avoid):
Front door should not have direct view to kitchen or bathroom
Bedrooms should not be side by side

Things to look for: bedrooms set up so that a bed may be placed on the north or south wall.

The author finishes the article with saying, regardless of the type of home you have, "at the end of the day, when you come home, do you feel like it puts its arms around you?"

The article gives some suggestions for making your current home more feng shui, so if this is something of interest, I encourage you to read the article or research more on this topic at your library.

Staging A Home for Sale

2005-02-06T17:24:00.000-08:00

Making a favourable impression on a potential buyer has actually become a business for some. DEKORA is an example of a company that prepares properties for sale. They provide cleaning, organizing, painting, landscaping and repair services. They also rent furnishings and art.

Painting is the one improvement that gives you the most bang for your loonie. A spotless interior makes an impact as well. So even if it isn't Spring, clean until everything shines. Eliminate personal artwork, magnets, etc. and clutter. Decorate to please the market, and not yourselves, so that buyers can picture themselves living there.

Remove pets from the home during open houses, and light a scented scented candle or potpourri to leave an inviting aroma in the house.

These are just a few of the tips to help your home sell faster and for a better price. A more comprehensive list is available through your realtor, or check out the article in "GLV", September/October 2004, "Home Staging", by Virginia Leeming for more information.

Property Transfer Tax Act Amendments

2005-01-27T20:20:00.000-08:00

This amendment changes the application of property transfer tax on pre-sold strata units purchased on or after January 1, 2001.

Previously, tax was based on the property's fair market value at the time of registration. The consideration paid at the time the unit was purchased could be substantially different than that at time of registration.

The new amendment that is retroactive to January 1, 2001, gives certainty to what the value of consideration will be (what the purchaser paid for the unit). This allows a first time homebuyer to know immediately if they qualify for the exemption, rather than not know until completion under the old regulation.

The Ministry of Provincial Revenue is currently reviewing pre-sold strata units that were assessed under the previous legislation and will revise assessments and issue refunds if applicable.

For more information contact: Minister of Provincial Revenue - Property Taxation Branch, at P.O. Box 9427 STN Prov Govt, Victoria, BC, V8W 9V1. On the web at www.re.gov.bc.ca.

Current Morgage Rates

2005-01-21T13:08:00.000-08:00

Current Mortgage Rates as Posted by Sutton Mortgage Company

Canadian fixed mortgage rates are linked to Bank of Canada bond rate for that term. For example, 5 yr. bond rate is 3.57%, and mortgage rates are typically 1.5% above that.

Overall, little changes is expected in rates in the next year, but keep an eye on the Canadian dollar and bond rates to predict fluctuations.

Rates as of 1/20/05

Term: Disc. Rate Bank Rate:
1 year 3.70% 4.7%
2 year 4.0% 5.0%
3 year 4.39% 5.5%
4 year 4.57% 5.8%
5 year 4.75% 6.0%
7 year 5.07% 7%
10 year 5.45% 7.65%
Variable rate 3.5%

Housing Prices to Increase 4.5%

2005-01-20T15:50:00.000-08:00

According to a December 21, 2004 article in the National Post, "housing prices will continue to outpace inflation in 2005, rising on average by 4.5%.

This same article states that "sales will cool next year, declining by 1% to 457,325 but the average home price in Canada will rise to $236,588 from $226,400." Vancouver prices are forecast to increase 3% to $399,000.